Equalized Valuation Changes for FY2023

New Jersey's 2023 Equalized Valuations are out again.  Changes in Equalized Valuation allow us to track changes in real estate growth and is a rough proxy for economic and population growth.

Since Equalized Valuation is half of the calculation of Local Fair Share, knowing districts' Equalized Valuations allows us to make predictions about state aid for 2023-24.

The following is a rough draft of some changes in Equalized Valuation.  My time budget does not allow for a more detailed post.

The big statewide news for Equalized Valuation is that NJ as a whole was up by +11.53%, the largest single-year increase I've seen.  Inflation has been 8%, so we have to take that into consideration and the fact that high-prices are not good for anyone entering the market, but it was a good year for NJ real estate developers and incumbent property owners.

It was actually a good year for most of New Jersey's urban core, with Jersey City, Newark, Atlantic City, Elizabeth, Trenton, and Paterson up by double digits. 

City	2022	2023	Change
Atlantic City	$2,752,388,675	$3,186,835,403	15.78%
Jersey City	$45,362,027,053	$53,311,025,176	17.52%
Newark	$14,465,468,748	$16,441,726,272	13.66%
Elizabeth	$10,418,709,083	$12,159,173,603	16.71%
Paterson	$8,998,986,504	$10,232,169,045	13.70%
Trenton	$2,582,977,552	$2,959,228,960	14.57%
Camden	$1,924,025,009	$2,079,195,100	8.06%
Hoboken	$16,829,227,462	$18,032,618,147	7.15%
Statewide	$1,430,600,617,782	$1,595,543,344,686	11.53%

 In recent years I've taken the time to point out that real estate growth in Newark was very slow and we should have nuanced reactions to stories about Newark undergoing gentrication, but 2021 to 2022 was a good year for NJ's largest city.

State Aid (with special attention to Jersey City)

The formula for Equalization Aid, the most important stream of state aid (it's 79% of all K-12 opex aid in 2022-23) is:

Equalization Aid = Adequacy Budget - Local Fair Share

The sub-formula for Local Fair Share 

(0.013089410*$7,948,998,123 x Equalized Valuation + 0.045610629 x Aggregate Income)/2

Which basically means that for every $1 million in Equalized Valuation a district gains, its Local Fair Share increases by $6,544.  If the Adequacy Budget is the same, its Equalization Aid would then decrease by $6,544.  For every $1 billion a district gains, its Local Fair Share increases by $6.5 million, with an equal decrease in its Equalization Aid.  

This is highly relevant for Jersey City because in 2022-23 Jersey City still receives $81.8 million in Equalization Aid (the Local Fair Share is $532,016,412 and the Adequacy Budget is $613,836,784).

Since Jersey City just gained $7,948,998,123 in Equalized Valuation, that increase alone will increase Jersey City's Local Fair Share by $52 million (0.013089410*$7,948,998,123 = $52 million).

Since there will be an increase in Jersey City's Aggregate Income and only a modest increase in the Adequacy Budget, it is probably that Jersey City's Equalization Aid will be $0 in 2023-24.

Counties

Ocean County's increase in EV was powered by Lakewood, which grew from $12,787,320,049 to $15,137,720,062 (+18%).

County	FY2022	FY2023	Percent Change
Morris	$100,371,465,846	$106,672,870,360	6.30%
Somerset	$68,148,823,973	$72,919,855,760	7.00%
Middlesex	$124,870,965,026	$134,579,509,060	7.80%
Mercer	$48,441,263,992	$52,492,331,858	8.40%
Salem	$5,291,911,739	$5,753,106,405	8.70%
Hunterdon	$23,010,081,617	$25,068,294,844	8.90%
Bergen	$193,321,100,266	$211,489,673,864	9.40%
Burlington	$51,994,270,597	$57,177,605,979	10.00%
Essex	$97,778,899,401	$107,860,131,308	10.30%
Sussex	$18,952,106,460	$21,042,879,041	11.00%
Warren	$11,983,166,544	$13,331,611,147	11.30%
Camden	$42,668,255,444	$47,515,984,655	11.40%
Passaic	$56,681,541,166	$63,255,164,747	11.60%
Union	$82,180,500,394	$92,786,150,813	12.90%
Cumberland	$9,238,093,282	$10,483,440,084	13.50%
Monmouth	$145,489,775,105	$165,157,472,619	13.50%
Atlantic	$34,633,360,265	$39,388,308,325	13.70%
Hudson	$103,861,425,091	$118,041,243,082	13.70%
Gloucester	$29,828,353,487	$33,981,473,096	13.90%
Ocean	$119,022,397,054	$140,368,062,141	17.90%
Cape May	$62,832,861,033	$76,178,175,498	21.20%
Statewide	$1,430,600,617,782	$1,595,543,344,686	11.53%

See Also:

• 2022 Equalized Valuations Are Out

• 2021 Equalized Valuations Show Economic Trends, Forecast State Aid Changes
• Changes in Equalized Valuation for FY2019
• The Divergent Fates of NJ's Big Cities
• 2016 Equalized Valuations Out (for tax year 2017)
• Biggest Real Estate Gains, Losses in NJ
• Two Cheers for County Taxes!  
• New Jersey and Its Neighbors Job Growth, County by County
• 2017 Changes in Equalized Valuation: the Urban Core Grows