Lawmakers Look to Expand Property-Tax Break for Veterans — Again

John Reitmeyer | November 8, 2019 | More Issues
Voters would be asked once more to approve relief, this time entitling all veterans to $250 deduction, regardless of when or where they served
Credit: Ron Doke/Flickr
A group of female veterans

Lawmakers want to further widen eligibility for a special property-tax deduction for New Jersey military veterans, just days after a limited expansion of the same tax break won approval at the polls.

Under a measure that received bipartisan support Thursday in the Assembly Military and Veterans’ Affairs Committee, New Jersey voters would be asked as early as next fall to approve making all military veterans who own a home eligible for a $250 annual property-tax deduction, regardless of when or where they served.

Right now, the $250 deduction is only offered to veterans who served during wartime or in-theater during certain peace-keeping missions, and to their widows or widowers. Tuesday’s statewide vote expanded the break to war veterans who no longer own homes and now live in senior facilities known as continuing care retirement communities, and their spouses.

The sponsors say widening the tax break would officially recognize the contributions of all who’ve served in the military, while also aligning the state with the federal government when it comes to similar tax breaks.

“A vet is a vet,” said Assemblywoman Cleopatra Tucker (D-Essex), the longtime chair of the committee. “Hopefully we can get this through both houses and we can get it on the ballot in 2020.”

Enshrined in state constitution

The first property-tax break for New Jersey veterans was written into the state constitution in 1947, just years after World War II ended. A 1963 amendment created a specific $50 deduction, and in 1999, voters agreed to bump that to $250.

Because the property-tax deduction is enshrined in the state constitution, even minimal alterations must be approved by voters.

The state also provides a full property-tax exemption to veterans who were totally disabled during a war or other conflict.

This week’s expansion of the tax break was easily approved by New Jersey voters, with three of every four saying yes.

The latest proposal to extend the tax break would impose only one restriction, that the veteran must have received an honorable discharge, according to the resolution.

The proposed expansion has the full support of the Veterans of Foreign Wars, according to Ken Hagemann, who serves as the organization’s state adjutant.

“It’s unfair that some bureaucrat or legislator who’s long gone decided this,” Hagemann said. “The VFW will do whatever it has to do to help you along with this.”

Right now, about 180,000 veterans and their widows or widowers receive the $250 tax break, according to data compiled by the state Department of Community Affairs.

Where the money comes from

The annual deductions are funded with proceeds from the state income tax, Trenton’s largest source of revenue. The annual cost of funding the existing tax break is $60 million, according to the latest official tax expenditure report prepared by the Department of Treasury.

Tuesday’s vote making veterans in retirement communities eligible to receive the tax break was estimated to cost no more than $550,000 a year, according to the nonpartisan Office of Legislative Services. A similar projection has yet to be prepared for expanding the tax break to all veterans and their widows or widowers.

The state also provides income-tax breaks for veterans, which do not require a public vote.

For example, lawmakers voted earlier this year to double the size of a tax deduction for veterans established in 2013 as part of a broader package of tax revisions that also boosted the state’s gasoline levy. In all, nearly 400,000 New Jersey veterans are eligible for the relief, which is now worth $6,000.