Social LibertyThe Region That Already Ran the Experiment
New York and New Jersey are fighting, separately, over the country's most inequitable property tax systems. Neither has looked at the state between them, which has been running a working alternative for over a century.
What Sacramento Is Deciding, Austin's Long Recess, Beacon Hill's Interval Training, and The View from Tallahassee each read a single capital's session. The South Rises and The River Decides What Seven States Couldn't broke that pattern to read a region as one thing, because the Census Bureau's own divisions sometimes track a real shared story better than any one statehouse does. The Middle Atlantic division — New York, New Jersey, and Pennsylvania — earns the same treatment this year, and for a reason none of the earlier regional entries had available to them: one member of this particular trio has spent over a century actually running the fix its two neighbors are currently fighting, separately and expensively, to invent.
The session calendar, first
Two of these three legislatures have already gone home for the year. New York's Legislature adjourned its regular session in June, per its usual calendar, and Albany is dark barring an extraordinary session the governor hasn't called. New Jersey's Legislature — now in the first year of the 212th Legislature, seated in January alongside the state's new governor — is between its budget session and its fall committee calendar, with floor votes on hold until after Labor Day. Pennsylvania is the outlier, the way it usually is: the General Assembly runs on a continuous two-year session with no fixed recess, and this August it's still in Harrisburg for the least voluntary of reasons — the commonwealth's budget, due June 30, isn't signed yet.
Pennsylvania: the state that already knows the answer
Pennsylvania's budget impasse this year is a rerun with the same cast as most of its recent ones: a Democratic governor and Democratic-controlled House on one side, a Republican-controlled Senate on the other, and a funding formula neither side can walk away from without conceding the point that started the fight. That formula fight traces back to William Penn School District v. Pennsylvania, the 2023 Commonwealth Court ruling that the commonwealth's education funding system violated the state constitution by letting a student's zip code determine the quality of the school a property tax base could support. The legislature's own Basic Education Funding Commission put the statewide adequacy gap at roughly $4.5 billion the following year. Every session since has been some version of the same argument: how much of that gap gets closed this year, and whose property tax base pays for it.
What almost never comes up in that argument is the one tool a handful of Pennsylvania's own cities have already been using to loosen exactly this bind. Scranton has taxed land and buildings at different rates since 1913 — one of the longest continuously running split-rate property tax systems in the country — taxing the land itself at a higher rate than what's built on it, on the theory Actual Modern Georgist Experiments already laid out in detail: a parcel's site value doesn't go up because its owner improved it, it goes up because the whole surrounding city did, so taxing the site harder and the building lighter stops punishing exactly the investment a struggling school district's tax base most needs more of. Aliquippa adopted the same split-rate structure in 1988, decades into its own post-steel fiscal collapse, for the same reason. Pennsylvania's enabling statute for the practice has been on the books since 1913. None of the current funding-formula fight in Harrisburg has cited it once this session — the state debating how much more revenue a shrinking property tax base can bear has a working, century-old alternative sitting in two of its own cities' code books, and hasn't put it on the table.
New York: a lawsuit standing in for the fix nobody wants to legislate
New York's version of the same underlying problem has been running through the courts rather than the legislature. Tax Equity Now NY — a coalition case the state's Court of Appeals allowed to proceed in 2023 — argues that New York City's own property tax classification system, splitting one-to-three-family homes into a class with capped assessment growth and co-ops, condos, and rentals into a class without one, systematically undertaxes expensive Manhattan brownstones relative to working-class homes in the outer boroughs, in direct violation of the state and federal Fair Housing Act and equal protection guarantees. The case is still working through discovery this year, and Albany's Legislature — controlled top to bottom by the same party, the same one-lever dynamic The South Rises diagnosed in a very different political direction — has had every session since 2023 to preempt the litigation with a legislative fix and has instead let the courts carry it. A land value assessment, which taxes what a lot is worth regardless of what's built on it, would dissolve the entire premise of the current class system rather than needing to litigate whether it's applied fairly. Nobody currently drafting a response bill in Albany has proposed that version of a fix.
New Jersey: the nation's highest bill, and a new governor's first budget
New Jersey doesn't need a lawsuit to prove its property tax problem — its residents pay the highest average property tax bill in the country, and every governor's first budget gets measured against that fact before anything else in it. Governor Sherrill's administration is building its first full budget cycle this fall against that same pressure, and the early signal from the transition has been more of the state's standard answer: an expanded ANCHOR rebate, the successor to the old Homestead rebate, cutting checks back to homeowners and renters rather than touching what's actually taxed or how. A rebate is real relief for the household that gets it, and it's also, structurally, the least durable kind of fix available — a check the next fiscal year's budget fight can always shrink, layered on top of an assessment system nobody in Trenton has proposed rebuilding.
What the region isn't asking
None of these three fights is actually separate from the others, even though each state is treating it that way. All three are the same underlying complaint — the property tax base a town or a state depends on doesn't track what it should track — showing up as a funding-formula fight in one capital, a discrimination lawsuit in another, and a rebate program in the third. Control of Human Actions Through Land and Transitioning to LVT have made the underlying case at length: the fix for all three versions of this complaint is the same fix, taxing site value instead of the improvements sitting on it, and one of the three states currently living the problem has had a hundred years of its own cities' evidence sitting one border away from the other two the whole time. What to watch this fall isn't whether Harrisburg signs a budget, or whether Tax Equity Now survives discovery, or how large New Jersey's next rebate check is — those will all resolve on their own schedules. It's whether any legislator in any of the three capitals spends this session's remaining months looking sideways at the answer next door instead of relitigating the same argument from scratch.
Sources: William Penn School District, et al. v. Commonwealth of Pennsylvania, Pennsylvania Commonwealth Court (2023); Pennsylvania Basic Education Funding Commission report (2024); City of Scranton and Aliquippa split-rate property tax ordinances, under the Pennsylvania municipal enabling statute of 1913; Tax Equity Now NY v. City of New York, New York Court of Appeals (2023); New Jersey Department of the Treasury, ANCHOR Property Tax Relief Program.