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Out-Of-Date Data Shortchanges Recipients of Homestead Tax Rebates

Thursday, May 5, 2016   (0 Comments)
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NJspotlight.com 05/05/16

Some of the New Jerseyans who need the most help paying their property taxes are being shortchanged by the program that was specifically put in place to assist them. And the problem affects 650,000 low- and middle-income homeowners, seniors, and the disabled who qualify for the state’s Homestead benefit program. On the surface, the problem seems simple enough. Homestead tax rebates are still being calculated using property-tax bills from 10 years ago, when the average homeowner was assessed for about 30 percent less than today’s record-high taxes. That includes the latest Homestead benefits, which many homeowners are receiving from the state this month.

Gov. Chris Christie’s latest budget proposal would extend the little-known policy again. But lawmakers have also begun to talk about ways to reverse it. That effort comes as they continue to sift through the new spending plan Christie put forward in February, as a July 1 deadline for a new budget that’s set in the state constitution draws nearer. If they’re successful, a change in policy could provide a nice boost for many seniors and other homeowners who qualify for property-tax relief each year through 40-year-old program. Christie also turned the Homestead rebates into a direct credit after he took office in early 2010. And he’s delayed the regular payment schedule at times to get the state through budget problems, which has created another lag. As a result, the benefits being paid out by the state this month are technically credits for property tax bills that were paid by homeowners in 2013 and are based on what they would have paid in 2006.

Christie’s proposed $34.8 billion spending plan for the fiscal year that begins July 1 would continue the practice of using the 2006 bills as the baseline. That will keep spending on the Homestead program essentially flat without having to make cuts in eligibility that would be politically unpopular with taxpayers -- particularly among the thousands of seniors and other homeowners in lower-income brackets that would be directly impacted. And in raw dollars, a continuation of the freeze would mean Homestead credits would be calculated for another year using bills that averaged $6,446, about 30 percent less than last year’s average bill of $8,353. When the freeze was first enacted by Corzine in 2008, then-Assemblyman Joe Malone (R-Burlington) called the move “deceptive,” predicting Trenton was on its way to making sure “there probably won’t be any rebates left.”


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