Trenton’s Latest Property Tax Relief Plan
Income tax revenue, by law, may only be used for property tax relief and is used to offset a community’s public school costs. Municipal aid, derived from other state taxes, is granted to further reduce property taxes. Without these two forms of state aid, total property taxes in New Jersey would be well over $32 billion.
These two major forms of property tax relief are currently reducing the average New Jersey resident’s property tax bill by 37 percent. Of course that’s an average. Some residents receive a property tax relief benefit as low as 3 percent and some 100 percent.
Word on the latest property tax relief plan from Trenton is beginning to emerge - Legislative leaders predict 20% property tax reduction:
Senate President Richard Codey and Assembly Speaker Joseph Roberts today said most homeowners can expect a 20 percent average property tax cut as a result of a property tax special session.
In a joint statement, the leaders said the relief will come as a tax credit on most property tax bills. Last year, the statewide average bill was nearly $6,000. Taxpayers paying that much would receive a $1,200 credit if they qualify for the full credit.
The relief will be based on a sliding scale, based on income, according to sources close to negotiations that are underway to hammer out the final details.
“Structural reforms are necessary, but immediate relief is essential,” said Roberts. “The finish line is in sight and we can make projections of the immediate property tax relief most homeowners will experience. An average 20 percent property tax credit for the majority of New Jersey households is achievable.”
Note the qualifiers – credit; 20 percent average; most homeowners; sliding scale, based on income; if they qualify; and hammer out the final details.This may be jumping to conclusions, but this new property tax relief plan sounds an awful lot like the old property tax rebate plan – the difference being a credit on the bill instead of check in the mail.
If Democrats really want to make their plan sound good, they could show three lines of property tax credit on each tax bill – the first line indicating school tax relief, the second showing municipal tax relief and the new, third type, can be labeled county tax relief.
Ta-da! An average of 37 percent property tax relief for everyone without spending an extra penny.
Update: We see our suspicions were correct - Most homeowners would get credit on bill as rebates are eliminated.
The legislative leaders said while the average tax bill would be reduced by 20 percent, most of the tax relief would be targeted to lower- and middle- income homeowners. Those in the upper brackets would get smaller reductions, or nothing at all.Republicans should offer a plan for real property tax reform that actually reduces property taxes. If Democrats refuse to bring the Republican plan to the Assembly floor for consideration, let Democrats explain it to the voters next year. The time for Republicans to begin this fight is now.
Assemblyman Rick Merkt (R-Morris), a member of one of the four special committees that have met since July to devise a comprehensive plan to reduce property taxes. "They did not bite the bullet and make the tough decisions needed to enact real property tax reform."
"Eliminate one program to initiate another -- that's heroic," he said. "I think this is obviously more of a smoke-and-mirrors program."
Codey dared Republicans to oppose a 20 percent reduction with all 120 seats in the Legislature up for election next year.