Rebate ‘Shell Game’ Makes It Hard to Track Property Tax Facts in New Jersey

Agency’s removal of info from annual report and website makes it nearly impossible to determine how much more homeowners are paying

Zoom in, move the map or search to find a municipality.

The average New Jersey homeowner paid $8,161 in property taxes last year, according to new data.

Determining how much that number has risen is another matter.

That’s in part because the Department of Community Affairs stopped publishing property tax rebate information in its annual town-by-town report on taxes and even removed from its website rebate information dating back to 2008.

It’s also difficult because the state’s rebate payments — now provided as a credit on individual tax bills — have been erratic over the last several years.

Archived information that includes the rebate information, though, provides a way to estimate the impact — and that shows mixed results:

  • The total tax levy for schools, counties and municipalities rose 12.7 percent in the first five years of the Christie administration, compared with a 30.9 percent rise from 2004 to 2009 under Democratic Govs. Jim McGreevey, Richard Codey and Jon Corzine.
  • The average tax bill, exclusive of the property tax rebate that is now a bill credit, rose 12.1 percent from 2009 to 2014, compared with 29.6 percent from 2004 to 2009.
  • When the rebate is included, however, the net average tax bill rose 30.7 percent under Christie, compared with 29.4 percent under the Democrats.
  • The data shows that the 2 percent property tax cap Christie put in place has mostly worked, with an annual increase statewide of 2.3 percent. It also shows that the rebate made a significant difference in Jerseyans’ net property tax burden, and the result of Christie’s revamping and reducing the program is evident in the change in the net tax bill.

    In 2004, the average rebate check — then typically mailed to homeowners each fall — totaled $687. Corzine increased the rebate, and it averaged $1,037 in 2009. Christie revamped the rebate program, making it a credit on state income-tax bills, making tenants ineligible, and limiting the rebate to seniors and disabled residents earning up to $150,000 and everyone else earning up to $75,000. The total budgeted for Homestead Benefits in 2015 was $374 million, just 22 percent of the $1.7 billion in Corzine’s last budget. Had Christie kept the tax relief program at the same level, he likely would have had to have raised some other taxes to pay for it.

    But in 2014, homeowners got no rebate, as Christie cited state budget woes in putting off providing the credits until this May.

    It’s the third time the governor has postponed giving credits to property owners under the Homestead Benefit Program, with the last credits reportedly provided in August 2013, according to New Jersey Policy Perspective, a progressive think tank based in Trenton.

    “Under Christie, property tax relief has been delayed three times while property taxes in New Jersey continue to rise to record levels,” said Sheila Reynertson, NJPP senior policy analyst.

    It’s unclear how much in rebates people are receiving, when exactly they have gotten them — or will get them — and how many years behind in paying them the state may be.

    Requests for information, clarification and comment on the benefit program from five administration representatives — two from DCA, two from the Department of Treasury and one with the Christie administration — went unanswered.

    Published reports indicate rebates were given in August 2013 and that the rebates funded through the FY 2015 budget would be delayed until May 2015 — leaving a period of almost two years in which homeowners would get no relief.

    Yet the state Department of Treasury website seems to indicate the benefits to be paid in May date back to 2012 and that the credits given in August 2013 date back to applications filed for 2011.

    The most current information on the department’s website page about the Homestead Benefit Program provides information on the 2012 Homestead Benefit. The page, which states it was last updated on August 20, 2014, states that the deadline for filing a 2012 application was January 31 of last year. It further states that “benefit amounts for 2012 will not be finalized until the completion of the State Budget for FY 2015, which must be adopted by July 1, 2014. Homestead benefits for 2012 are expected to be applied to May 2015 property tax bills. Additional information on the 2012 homestead benefit will be posted when it becomes available. Homestead benefits for 2012 are expected to be applied to May 2015 property tax bills.”

    The rebate was designed to provide relief from the state’s highest-in-the-nation property taxes. The DCA had always included this information in the property tax information tables it provides for each municipality and the state each year. But it stopped doing so, and even removed the data from years dating back to 2008.

    An original spreadsheet from 2012 — the most recent available with the data — shows that the rebates averaged $474 statewide. It’s even hard to compare this with the previous rebates, though, as it is the average for those who got a credit, and many thousands of those who used to get rebates have not gotten one during the Christie years.

    According to the state Division of Taxation’s Homestead Benefit Program website, seniors and the disabled were eligible for a maximum credit of 10 percent of the taxes paid up to $10,000 in 2006 if their income was $100,000 or less. Anyone else with an income of $50,000 or less could get the same percentage. In 2006, the average property tax bill was $6,446, which would mean an average benefit of $645 for those qualifying for the maximum.

    Still pending in the Legislature is a bill that would force DCA’s Division of Local Government Services to again include the average rebate information, in addition to other property data, in the spreadsheets it posts online. That measure passed in the Assembly with bipartisan support and is awaiting action by the full state Senate.

    “Open and honest government is paramount,” said Assemblywoman Annette Quijano (D-Union) last month when the bill, which she is co-sponsoring, cleared the Senate Budget and Appropriations Committee. “It’s unacceptable for the administration to try to hide information that reflects poorly on its own decisions and storylines. The more information provided, the better it is for taxpayers.”

    Without that information, calculating a one-year change is even trickier. The average property tax bill in New Jersey, excluding the Homestead Benefit, rose 2.2 percent between 2013 and 2014. But since homeowners did get a credit in 2013, and did not get one in 2014, they had to pay more.

    If the average rebate of $474 statewide reported for 2012 held true for 2013, the one-year average net property tax bill increase from 2013 to 2014 would be 8.6 percent. Without full transparency by the state in reporting rebates as well as taxes, though, that number is impossible to determine.

    Christie and members of his administration have argued in the past that the Homestead Benefit amount should not be considered when determining changes in property taxes. However, Christie himself changed the program from a rebate — in which each eligible home owner received a check — to a credit, where the amount was deducted from the tax bill, thus resulting in a lower tax bill.

    The map shows that largest cluster of municipalities with the smallest five-year net increases, with rebates factored in, were in wealthy Hunterdon and Morris County communities. Most of the municipalities with the largest tax increases tended to be along the Jersey Shore and those along the Delaware River in Camden, Cumberland and Salem counties.