Fine Print: Forcing Administration to Post Detailed Property-Tax Data

Christie contends he’s capped property-tax increases at 2 percent, but cutting Homestead Rebates funding has driven net property taxes higher

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What it is: Lawmakers have been trying to get Assembly bill A-3223 to Gov. Chris Christie’s desk for the better part of the past year. The legislation would force the administration to put back online detailed property-tax data that shows some residents are paying higher net property-tax bills five years after Christie reduced funding for the Homestead property-tax relief program.

The bill was introduced last year after NJ Spotlight reported that the information about net property-tax bills, which has traditionally been posted on the state Department of Community Affairs’ website, had been removed going all the way back to 2008, two years before Christie took office.

Where it is now: The Senate voted 32-2 in favor of the legislation earlier this week. Another version of the bill passed the Assembly unanimously last year, but the Senate made a technical change to the legislation and it now has to go back for another vote. The Assembly’s next voting session is on March 26, and officials said the bill could make it onto the agenda.

What a net property-tax bill is: Nearly 700,000 New Jersey homeowners qualify for Homestead property-tax relief, and the state used to post data online each year that demonstrated in detail how the program helped to offset property tax bills for eligible homeowners in every community. One column showed the average property-tax bill paid by residents in each town, and another column depicted the average net property-tax bill calculated by subtracting the average Homestead benefit paid to residents.

In communities where most homeowners qualify for the Homestead benefit, the columns showed average net bills had risen by about 20 percent.

Homestead funding cuts: Christie converted the Homestead benefit from a rebate check into a direct credit on property-tax bills, but qualifications have remained the same throughout his tenure. Seniors making up to $150,000 annually and other homeowners making up to $75,000 annually are eligible. But it’s the reduction in funding for the program that has had the biggest impact on the size of the benefits paid out to homeowners.

The last budget enacted by former Gov. Jon Corzine, Christie’s immediate predecessor, included more than $1 billion for the Homestead program. But during the past fiscal year under Christie, about $400 million was appropriated for Homestead benefits, and Christie is recommending $341 million for the fiscal year that begins July 1.

As a result of the funding reduction, property-tax relief that used to average over $1,000 before Christie took office now averages $516 for seniors and $402 for the other eligible homeowners.

The relief payments have also been delayed several times during Christie’s tenure due to budget problems. In 2010, he suspended the Homestead program for a year since the state was in the midst of a recession. A revenue shortfall in 2013 also delayed payments, and last year no property-tax relief was paid out at all thanks to a $1 billion budget gap, forcing recipients to wait until this May for their next credit.

Why it’s important: Public opinion polls have shown that New Jersey’s high property-tax bills have long been one of the top concerns of the state’s voters, and the Homestead program has traditionally been used to help offset rising bills for seniors and other low- and moderate-income homeowners.

Christie has touted a 2 percent cap on property-tax hikes that he and lawmakers enacted in 2010 as having helped to slow the rate of growth in property tax bills. But they are still rising consistently every year, and 2014 marked the first time that bills grew by more than 2 percent since he took office. The average New Jersey property-tax bill last year went up by $173 to a record-high of $8,161.

And in the years in which there have been no Homestead benefits paid out at all, including 2010 and 2014, the impact of the annual increases on Homestead recipients has been even higher.

What the administration says: Christie’s administration has preferred to focus on the effectiveness of the 2 percent property-tax cap, which went into effect starting with the 2011 tax year, saying that has helped all homeowners, whether they qualify for Homestead relief or they don’t. Department of Treasury officials have also maintained that since not every homeowner in a community qualifies for Homestead relief — and there are some wealthy communities where many do not — it’s misleading and not statistically valid to put forward a net average property-tax bill that may only represent bills paid by some residents.

Treasury officials also maintain recent cuts in funding for the Homestead relief program are simply the result of trends in eligibility and participation.

What lawmakers say: Both Assembly sponsor Troy Singleton (D-Burlington) and Senate sponsor Paul Sarlo (D-Bergen) point to good-government and transparency as reasons to support the legislation. Whether the information portrays the administration in a favorable or unfavorable light, they maintain taxpayers have a right to see all of the relevant data going back 10 years. They also note that the information helps shed light on the decisions that local government officials are making as well when it comes to spending.

What happens next: If the measure makes it onto the Assembly’s March 26 voting agenda and wins approval again, it could get to Christie’s desk for consideration by the end of the month. Christie could ask lawmakers in a conditional veto to make clear that the net property-tax bill may not represent every homeowner in each community, but given his administration’s firm position on the issue an outright veto is expected. Because the bill’s general mission has already won wide approval in both houses, if lawmakers stick to their guns the issue could become the first to generate a successful override of a Christie veto since he took office in early 2010.