Yarnall, 76, a retired computer specialist, pays $9,053 in property tax - about one-quarter of his fixed income - on his two-story colonial on Weston Drive in Cherry Hill. That's up from $6,344 in 2002, a 43 percent jump.
"When I retired, I thought I was in good shape," he said. But every year, "I'm taking more and more out of our savings. It will be gone in eight to 10 years."
Last week did nothing to allay his fears.
On Monday, the state legislature passed a $32.9 billion budget for fiscal 2008-09 that lowers or erases $254 million worth of property-tax rebates for more than 500,000 residents - just a year after the rebate checks were pumped up to ease the increasingly onerous burden on homeowners.
The budget also pares $160 million in aid to municipalities, which have long complained that Trenton gives them short shrift, thereby forcing them into an untenable dependence on the real estate levy.
Between 2002 and 2007, property-tax collections went from $16 billion to $22.1 billion - a 38 percent jump caused largely by the ballooning costs of running schools and towns. That increase was more than double the inflation rate in the same period. And, yes, that was with rebates included.
"They did take a tough hit," Gov. Corzine said last week of the municipal cuts, part of the budget's $600 million in cutbacks. "I understand that. Just as the [state] government is taking a tough hit."
However, he said, the decreases in rebates and municipal aid would be counteracted by a $570 million increase in education funding, and that would mean some savings for property owners.
Corzine said he did not believe that "the overall impact will be as powerful as is being suggested."
One of those doing the suggesting is William G. Dressel Jr., executive director of the New Jersey State League of Municipalities. He has referred to the real estate levy as "the Jason and Friday the 13th property-tax monster." And that was before the new budget passed.
Last week, a steamed Dressel recalled the Corzine administration's vow, early on, to tame the tax. Now, "they are setting a whole new standard in terms of degree of hurt," he said. "Every dollar [cut from municipal aid] is going to have to be made up with property-tax increases, or reductions in service."
The timing is terrible, he added. "The economy is going south. Residents are seeing skyrocketing fuel costs, food costs. Essential expenses for maintaining your household are going through the roof."
The state sales- and income-tax revenues are unexceptional, in the bottom third nationally. But the chart-busting real estate levy erases that advantage, leaving New Jerseyans with one of the highest overall tax burdens.
Several factors have put the state on the local-tax pedestal:
New Jersey ranks third among populous states for the number of public employees per capita working for school districts and towns.
With New Jersey's cost of living one of the highest in the country and its labor unions effective, that force of 350,000 is better paid than anywhere but California - on average, $55,000 a year.
They serve a local government system that, like Pennsylvania's, is among the most fragmented. The 567 municipalities, 611 school districts (110 more than its much larger neighbor), and 212 fire districts each have the authority to tax their residents, bundling the bulk of their expenses into one steroidal levy.
In the three South Jersey counties next to Philadelphia, real estate appreciation has significantly lagged that in the Pennsylvania suburbs, where the effective tax rate - that is, the average bill expressed as a percentage of the average home's value - is 30 percent lower. In other words, for every $100,000 of home value, New Jerseyans pay $820 more in property taxes than their neighbors across the river.
While the property tax's impact on individual homeowners is as clear as Washington's face on a dollar bill, its effect on New Jersey's general economic health may be impossible to quantify. Some evidence, however, suggests worrisome consequences.
Could the property tax also be fueling an exodus?
A recent Rutgers University study notes an inordinate migration of residents from the state. Between 2001 and 2006, 1.1 million New Jerseyans, or one in eight, left, and 883,000 moved in - a net loss that bumped the state out of the top-10 list for population. James W. Hughes, dean of Rutgers' Edward Bloustein School of Planning and Public Policy and an expert on the Jersey economy, blames the hemorrhage on "a bundle of concerns," from the high cost of living and doing business to growing traffic congestion. The property tax, Hughes said, cannot be teased out as a culprit.
Carolyn DiMedio is hardly so circumspect.
When she and her husband, Ron, bought a house 20 years ago on Kings Highway in Haddon Heights, Camden County, their tax bill was $3,300. They assumed it would be the last home they'd ever own.
That changed on a steamy morning last summer when she opened the mail to find that the assessment on her home had been raised from $318,000 to $957,000, and with it her tax bill, from $16,000 to $26,000.
While Pennsylvania's reassessments are large-scale affairs conducted by the counties, the work in New Jersey falls to municipalities. Several Camden County communities, including Haddonfield and Collingswood, reassessed recently. But when Haddon Heights did, things got ugly.
In 2006, property assessments there stood at only 60 percent of market value. The round of reappraisals adjusted them to 100 percent. The DiMedios' assessment tripled.
The most famous landmark in town is the cannon in Memorial Park - fitting, since Haddon Heights turned into a battleground. In November, the mayor and two of the six council members were voted out of office. Nearly a quarter of the 2,800 homeowners appealed their taxes, including the DiMedios.
The DiMedios' appeal was denied.
"They have taxed me out of my home," said DiMedio, 55, who designs store-window displays. "It breaks my heart to say it. I have been brought to tears."
Her husband, a manufacturing executive, is turning 60. "We want to retire," she said. "But we can't retire and pay this tax bill."
She added, "At this point, I don't want to stay in this state."
The DiMedios posted a sign in their yard: "New Jersey: The Garden State, where we're watching our taxes grow."
Al Lintner, 73, a retired school psychologist, put the same placard on his lawn on South Third Street after his assessment jumped from $124,600 to $332,200.
Below the slogan he wrote the figure "$8,681" - the new tax bill on his cluttered frame house, up from $6,255 last year. Paying it will take about 20 percent of his fixed income. He fears having to give up the modest home that has been in his family since it was built in 1920.
The place across the street has been up for sale. One Sunday, when the neighbor hosted an open house, Lintner kindly removed the sign in his yard. When the prospective buyers left, he replanted it.
A history of home rule
How did New Jersey become one of the most locally governed states in the country?
And why is the overwhelming majority of the cost borne by property owners, who pay far more than their Pennsylvania counterparts?
Historically, New Jersey has been a home-rule state, and the tradition persists, said Ernest Reock, professor emeritus at Rutgers' Center for Government Services. In the early 1960s, he said, "we were the empty place between Philadelphia and New York."
Now the void is chockablock with local governments.
Alan J. Karcher, speaker of the state Assembly in the 1980s who died in 1999, wrote that the tangle of town boundaries looked like "a web woven by a spider on LSD."
Of the 567 municipalities, one-fifth have fewer than 2,500 residents, according to the state Department of Community Affairs. And nearly every community has its own school system.
Local governments have no choice but to tax real estate. State law prohibits them from imposing any other levies.
In Pennsylvania, since the mid-1960s, municipalities and school districts have been allowed to also use earned-income and "nuisance" levies. The tangle of local taxes adds to the chaos and confusion that are hallmarks of the Pennsylvania system. On the other hand, the extra levies do help hold down property-tax rates.
New Jersey offsets some property-tax costs with grants to towns for rebate checks. Last year, the rebates knocked about 15 percent off the average bill. But with the fresh cuts, that reduction will be lower next year.
"We ask local jurisdictions to do an awful lot and give them access to only one revenue source," said Henry Coleman, a Rutgers public-policy expert who authored a seminal study on New Jersey's taxation system.
Municipalities claim 20 percent of the average property-tax bill - three times as much as a typical suburban Pennsylvania town does. For instance, of the DiMedios' new $26,000 tax bill, Haddon Heights gets $5,720, or 22 percent.
Education gets 58 percent.
New Jersey schools rank second in the nation for per-pupil expenditures, outspent only by New York. But at the same time, New Jersey ranks in the bottom half of the pack for the portion of school costs picked up by the state: 44 percent.
Despite Corzine's changes in the subsidy formula, state aid is still targeted to high concentrations of low-income students.
The Moorestown Township School District, for instance, gets minimal money from Trenton - about $6 million, or 8 percent of its budget - and that contributes to hefty property-tax bills. The Camden district receives more than $300 million, or 85 percent of its budget. But there, as in other poorer communities that get substantial state aid, the property levies are high anyway because their real estate tax bases are so meager.
New Jersey's 21 county governments are wholly dependent on the property tax, virtually their only money source. In Burlington, Camden and Gloucester, 22 percent of the average bill goes to the county - almost double the portion in the four Pennsylvania suburban counties. That amounts to an extra $500 per household in the Garden State.
In 1996, when his wife landed a new job, Jerry W. Cantrell sold their home in the Wayne area of Upper Merion Township, Montgomery County, for $190,000. They moved over the Delaware River to a comparable community, Randolph Township, Morris County.
There they bought a home for $268,000, or 41 percent more. But their tax bill nearly quadrupled, from $1,700 to $6,200.
"It's stopped making sense over here," said Cantrell, who went on to organize the New Jersey Tax Association, an activist group of about 3,000 members.
People are angry, he said last week. "The economy, the price of oil, falling home prices - suddenly people are refocused on their wallets," he said. "Everyone realizes New Jersey is facing a crossroads. If the status quo is maintained, the future is not at all bright."
What can be done?
The consensus among various policy experts is that to reduce property taxes, local governments and schools would have to cut expenses and the state would have to contribute more money to local costs. New Jerseyans, however, would pay a price in increased sales or income taxes.
Rutgers' Coleman said that by upping its school support alone, Trenton would be taking a giant step toward solving the property-tax imbroglio. If New Jersey paid anywhere near the national average for state aid, property-tax bills would no longer be chart-toppers.
Another idea - reducing salary costs to tame the levy - does not sit well with Steve Baker, a spokesman for the New Jersey Education Association, representing more than 200,000 current and retired school employees.
Common sense dictates that government workers be well-paid, he said, because "New Jersey is a very expensive state in which to live. I think that is the single greatest driver of wages and benefits in many fields, including public education." School systems, he added, must "compete with private industry for top candidates."
An oft-suggested remedy for the property-tax headache is regionalization - merging towns to shrink local government costs. Corzine has promoted the concept, at one point threatening to withhold aid from those that refuse.
His administration acknowledges, however, that it has no evidence that consolidating services would lead to reduced taxes. Nor has the governor commissioned any studies.
An Inquirer analysis found that governments in larger South Jersey towns spend 16 percent more per capita than those with fewer than 10,000 people.
"Getting rid of small towns isn't going to change anything," said Gibbsboro Mayor Ed Campbell, who conducted a similar study statewide and reached the same conclusions. He said that if his town merged with Voorhees, for instance, police now making $35,000 would have to be paid more.
Joe Doria, New Jersey community affairs commissioner, said the analyses don't take into account the fact that large towns provide more extensive, complex services, including more law enforcement. Therefore, small-town government appears less expensive.
In any event, merging services is worth the effort, said Jon Shure, president of New Jersey Policy Perspectives, a Trenton think tank.
"In the long term, it would save more money because it might change the way we are doing things," Shure said. "But I don't think it should be oversold on how many billions it would save."
Nothing can happen soon enough for Carolyn DiMedio, staring down the gun barrel of a $26,000 tax bill in Haddon Heights.
"Could we afford to stay here? Yeah," she said. "We wouldn't be able to afford steak and potatoes. And I have four grandchildren. I want to take care of them."
Her younger daughter, a student at St. Joseph's University, had big plans for the house that her parents might have to sell.
"She's devastated," DiMedio said. "She always envisioned she would get married in this home. It's not going to happen."
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Contact staff writer Anthony R. Wood
at 610-313-8210 or firstname.lastname@example.org.
Inquirer staff writers Dylan Purcell and Jonathan Tamari contributed to this article.