How are property tax rates established in New Jersey?

Property tax rates in New Jersey are primarily established by dividing the municipal budget by the total assessed value of all properties within the municipality. This method ensures that the tax rate is determined based on the financial requirements of the municipality as articulated in its budget.

When a municipality prepares its budget, it outlines how much funding is necessary to support services and infrastructure for the coming year. By calculating the total assessed value of all properties, the municipality can then set a fair tax rate that distributes the tax burden equitably among property owners. This approach reflects both the need for funding and the value of the taxable properties in the area, making it a balanced way to determine the property tax rate.

Other methods, such as averaging sales or calculating needed funds for state funding, do not address the direct relationship between local budgetary needs and property assessments, which is a fundamental aspect of New Jersey's property tax system. Thus, the calculation method involving the municipal budget and total assessed value accurately captures the basis for establishing property tax rates in the state.