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The Boss
THE HIGHEST TAXED CITY

By David Dayton McKean
This Web version, edited by GET NJ, COPYRIGHT 2003

In 1932 the railroads refused to pay the taxes levied by Jersey City on second-class railroad property (yards, docks, terminals, etc., as contrasted with inter-city lines which are assessed and taxed by the state), and since that time the city and the railroads have been involved in litigation. More than one half of the total of second-class railroad property in New Jersey lies within the taxing district of Jersey City, and taxes upon it represent approximately twenty per cent of Jersey City's total levy. The railroads lost their case, and all but one paid their taxes; the Central Railroad of New Jersey, however, alleging that it was unable to pay the taxes, went into bankruptcy in 1939.

In December, 1939, Raymond M. Greer. comptroller of Jersey City, filed an affidavit with Federal Judge Guy L. Fake in which he alleged that unless the court compelled the railroad to pay its taxes Jersey City would be forced either to default again on its debt payments or to impose a tax rate of $54.11. `Such a tax rate,' he said in his affidavit, `is obviously uncollectible and confiscatory.' The court ordered the railroad to pay 60 per cent of its 1939 tax bill, and Jersey City received $780,781. The city failed to receive $312,312, and the tax rate went to $53.13. The amount $312.312 is just a drop in the Jersey City bucket: it would not be sufficient to meet the budgetary item `Bread, rolls. milk, and groceries' at the Medical Center. But if a tax rate of 854.11 is `obviously uncollectible and confiscatory,' what is a rate of $53.13 to be called? The difference is only ninety-eight cents. The city received 60 per cent of what it asked for, and still the tax rate went to a new high.

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