In the past few months, much has been written about a study released by the Manhattan Institute supporting Cap 2.5, the Governor's proposal to amend the State Constitution so that no municipality can increase property taxes above 2.5% without approval from the voters. The Manhattan Institute is a conservative, market-oriented think tank.
In a publication entitled "Do Property-Tax Caps Work: Lessons For New Jersey From Massachusetts," the Manhattan Institute's Josh Barro writes that Massachusetts’s experience with capping property tax increases at 2.5% annually could significantly restrain tax growth without hurting educational outcomes in New Jersey. While the rate of increase in Massachusetts' property taxes has slowed significantly since the implementation of the cap, current educational test scores are slightly better than those in New Jersey.
Governor Christie was happy to present this study to the public as proof that New Jersey can cap property taxes without sacrificing excellence in education. However, the Governor failed to highlight one key fact. In an endnote to his report, Mr. Barro writes:
"Readers may be interested to know: If high spending does not explain Massachusetts’ unparalleled educational success, what does? A full answer is beyond the scope of this paper. But policy experts have pointed to a series of curriculum and testing reforms in the 1990s that appear to have significantly improved performance."
So, to be clear, property taxes were capped in 1980, but Massachusetts' educational success stems from curriculum and testing reforms enacted over a decade later. So what happened between the time property taxes were capped and educational reforms were enacted?
The Center on Budget and Policy Priorities has reviewed the Manhattan Institute's report and provided an answer to this question.
"Schools suffered in Massachusetts between the adoption of the [property tax] cap in 1980 and the 1993 [state education policy] reform. In 1991, the state's Board of Education warned that there was "... a state of emergency created by grossly inadequate financial support of the public schools..." and that "[c]ertain classrooms simply warehoused children at this time, with no effective education being provided."
The CBPP goes on to find many flaws with the data and methodology of the Manhattan Institute. (To be fair, the CBPP is not without its critics on the right.) However, both reports seem to be indicating the same thing: the state policy reforms of 1993 are responsible for Massachusetts strong public education program, not the property tax cap of 1980.
But what is most devastating about both reports is the inescapable fact that from 1980 to 1993, public education was on a downward trajectory. So a Massachusetts student who entered the first grade in the fall of 1980 and graduated high school in the spring of 1993 spent his or her entire academic career in a failing public school system. That's an entire generation of students who have been poorly served.
Governor Christie wants to impost a property tax cap in New Jersey, but has yet to put forward a plan for maintaining the quality of education in our public schools in the face of a changed funding environment. In fact, all Governor Christie has put forward is a plan to send public school students and dollars to private schools.
So the outcome is clear. Cap 2.5, as currently proposed, will be a disaster for our schools.