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Liberal Think Tank Urges Property Tax Relief – But Only to Those Most in Need

New Jersey Policy Perspective proposal emphasizes tax equity in property tax plan.


A liberal public policy institute weighed in yesterday with a proposal to provide property tax relief to those who need it most by providing property tax cuts only to those whose property tax payments exceed a set percentage of their income.

David Rousseau, New Jersey Policy Perspective’s budget analyst who served as state treasurer under former Democratic Gov. Jon Corzine, yesterday urged that New Jersey consolidate all of its existing property tax relief programs into a “circuit breaker” strategy that would provide property tax relief only to those who are most in need.

“For four decades, candidates have promised New Jersey homeowners property tax relief. And for just as long, property tax bills have risen to crush the budgets of families least able to afford them,” NJPP President Gordon MacInnes said, emphasizing the need for property tax reform to be based on principles of tax equity and ability to pay.

“The ‘circuit breaker’ idea goes back to the original debates on the income tax [in 1976], and it’s the right thing to do, but it’s harder to do politically,” Rousseau acknowledged. “Political leaders always want to give tax relief to everybody,” rather than put together a more limited program that provides tax relief only to those who really need it, he said.

NJPP’s emphasis on tax equity and the concept of limiting property tax relief only to those whose property taxes exceed a certain percentage of their income is a far different approach from other recent property tax cut plans, noted Marc Pfeiffer, assistant director of the Local Government Research Center at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy.

In 2012, Senate President Stephen Sweeney (D-Gloucester) proposed a property tax cut up to $1,000 on the first $10,000 in property taxes for those earning up to $400,000 -- a plan that Republican Gov. Chris Christie later endorsed. Assembly Majority Leader Lou Greenwald (D-Camden) proposed a cut of up to $2,000 on the first $10,000 in property taxes for those making up to $250,000, a more ambitious plan funded partly by a “millionaire’s tax,” which Christie opposed. Neither Christie nor Sen. Barbara Buono (D-Middlesex), his Democratic opponent, responded to requests for comment on NJPP’s proposal yesterday.

Both the Sweeney and Greenwald plans would have provided property tax relief to the overwhelming majority of New Jersey residents. “You have to provide broad property tax relief in the suburbs if you’re going to create legislative buy-in and public support,” said William Schluter, a former Republican state senator from Hunterdon County who has been a leading proponent of property tax reform.

In June, the New Jersey State League of Municipalities Property Tax Reform Task Force laid out an option for a 35 percent property tax cut of up to $7,000 on the first $20,000 in property taxes for all homeowners to be paid for by combining all existing property tax relief programs and by shifting $3.9 billion of the current $20 billion residential property tax burden to the state income tax. That plan was designed to rebalance New Jersey’s tax system -- under which citizens pay more in property taxes than all state taxes combined -- and to make New Jersey’s residential real estate market more competitive.

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