New Jersey just increased funding for a key state property-tax relief program, and this month homeowners across the state are getting their first opportunity to apply for those beefed-up tax breaks.
Thousands of New Jersey homeowners have begun receiving applications from the state Department of Treasury via the mail and electronically for the latest round of Homestead property-tax relief benefits.
Shortchanging, a thing of the past
The applications are the first to be distributed since a new state spending plan enacted earlier this year by Gov. Phil Murphy and lawmakers halted the state’s longstanding practice of shortchanging Homestead recipients by using outdated property-tax bills as a baseline for calculating benefits.
As a result, the funding for the Homestead program was increased and the size of the average benefit went up by at least $130.
The Homestead program provides targeted tax breaks to thousands of seniors, people with disabilities and thousands of other low- and middle-income homeowners.
Applications are being distributed to homeowners through the end of the September, according to a schedule posted on Treasury’s website last week. The deadline for filing an application is Nov. 30,.
Homeowners making up to $75,000 annually are eligible for Homestead benefits, as are seniors and disabled homeowners who make up to $150,000 annually. According to Treasury, the income amounts apply to a single individual, a married/civil-union couple living in the same residence and married/civil union partners maintaining separate residences.
The program was first launched as a rebate check, but most recipients who qualify now receive their benefits as a direct credit on their local propert-tax bills.
Despite perennial concerns about New Jersey’s high property-tax bills, governors and lawmakers have frequently meddled with the Homestead program, often as a way to ease pressure on the state budget when economic downturns brought unexpected dips in revenue. That’s helped create a big gap between when benefits are funded in the state budget and the tax year that the benefits are intended to offset.
The latest round of benefits, scheduled to be paid in May 2022, are intended to offset the property-tax bills from 2018.
Same old end run
Earlier this year, NJ Spotlight News detailed how Murphy’s first draft of the fiscal year 2022 spending plan called for continuing the practice of inserting technical language into the annual budget to keep property-tax bills from 2006 as a baseline for calculating Homestead benefits.
The same story detailed how the average New Jersey property tax bill has increased by 40% since 2006 — to a record-high of $9,122 — even as governors and lawmakers from both parties had repeatedly inserted that budget language to maintain the outdated formula for calculating benefits, thus shortchanging eligible homeowners, collectively, by millions of dollars annually.
Under the Homestead policy change that was included in the final version of the annual budget enacted by Murphy and lawmakers earlier this summer, the new round of Homestead benefits that New Jersey homeowners can begin applying for this month will use 2017 property-tax bills as the baseline year.
In a recent post on social media, state Treasurer Elizabeth Maher Muoio encouraged homeowners to apply for the beefed-up tax breaks, calling the recent policy revision “a significant change.”
Last year, Murphy and lawmakers held back funding for Homestead benefits after revenue losses experienced during the first few months of the coronavirus pandemic swamped the state’s meager budget reserves. That round of benefits, offsetting tax year 2017 property-tax bills, was eventually paid out in May 2021.
Roots in the Great Recession
But the longstanding practice that resulted in the annual shortchanging of Homestead recipients was initially enacted as a cost-saving measure more than a decade ago during the 2007-2009 Great Recession.
At the time, Democratic Gov. Jon Corzine and lawmakers wrote language into the budget to hold Homestead benefits flat by using property-tax bills from 2006 as the program’s baseline year, superseding state statute that calls for using more current bills to calculate benefits.
The freezing of the baseline year for the Homestead program remained in effect ever since, and even after the state economy eventually rebounded from the Great Recession during Republican Chris Christie’s eight-year tenure as governor.
It was finally reversed in the fiscal year 2022 budget enacted by Murphy in late June — weeks after lawmakers questioned the amount of Homestead funding the governor included in his first draft of the fiscal year 2022 budget. The increased allocation pushed annual spending on Homestead tax breaks up by nearly $80 million, to $339.5 million.
More information about the Homestead program is available online at or via phone at 1-888-238-1233.