Move Comes Amid 20 Percent Net Property Tax Increase Under Christie
(TRENTON) – Continuing their effort to send vital tax relief where needed most, Assembly Democratic leadership on Tuesday unveiled a 20 percent property tax relief credit for New Jersey’s middle-class and lower-income homeowners.
The Assembly Democratic plan would help 95 percent of New Jersey homeowners and provide a maximum credit of $2,000, with the average family in line to receive a $1,552 credit that would provide relief against property taxes that have soared a net 20 percent under Republican Gov. Chris Christie.
“This is geared directly toward helping New Jersey’s middle-class and lower-income families who have shouldered a heavy burden the last two years,” said Assembly Speaker Sheila Y. Oliver (D-Essex/Passaic). “It focuses on our state’s most painful and regressive tax and sends help where it’s needed most – to New Jersey’s working class families. It’s a plan everybody should support to help New Jersey’s middle-class and poor struggling to make ends meet and keep their homes.”
“The evidence is clear that Gov. Christie’s proposed income tax scheme would benefit the rich far more than New Jersey’s middle-class, but our plan steers us back in the right direction and provides help against the tax that burdens working families the most,” said Assembly Majority Leader Lou Greenwald (D-Camden). “We’re providing help to our middle-class families who have suffered while Gov. Christie protected tax cuts to the wealthy, and we’re targeting the pain eating away at our state – the property tax. This is a plan everyone should rally behind on behalf of our middle-class.”
“Gov. Christie is focusing on a tax cut that benefits the extremely wealthy and provides a nice sound bite for national conservative activists, but our focus is and always will be on hard working middle-class families here in New Jersey who struggle to make ends meet and pay their property taxes,” said Deputy Speaker John Wisniewski (D-Middlesex). “If we want to make New Jersey more affordable and competitive, then we must tackle the property tax. That is our goal with this pro-working family plan.”
“Our goal must be to help our struggling middle-class and lower-income families,” said Assembly Budget Chairman Vincent Prieto (D-Hudson/Bergen). “We know tax cuts for the rich neither help our economy nor our middle-class, so let’s put the focus where it belongs – on New Jersey’s working families. Let’s do the right thing and provide real, reliable and responsible property tax relief in a way that helps nearly all our middle-class and poor.”
A recent analysis by www.njspotlight.com found that Christie’s cuts to the property tax rebate program mean net property taxes are 20 percent higher under Gov. Christie than they were before he took office.
The Democratic plan would provide a property tax relief credit – through the gross income tax return – for all residential homeowners with incomes up to $250,000 in the amount of 20 percent of the first $10,000 in property taxes paid.
This would provide a maximum property tax relief credit of $2,000. Based on the 2011 average residential property tax bill, the average family would receive a property tax relief credit of $1,552.
As a comparison, a family earning $100,000 that pays $8,000 in property taxes would get $1,600 under the Assembly Democratic plan, compared to $275 under the governor’s plan.
The plan would be phased-in over four years – just as the governor’s plan – but substantial relief would begin immediately, with the first year providing a credit of 20 percent of the first $5,000 in property taxes paid.
Under the plan, there would be no statutory change to the existing property tax rebate/credit program, but homeowners qualifying for the property tax relief credit would receive the larger of the two.
The Senior Freeze property tax relief program would remain in place.
Also, the minimum credit under the existing property tax deduction for those not qualifying for the new credit would triple from $50 to $150. This would primarily benefit tenants. Tenants would also continue to remain eligible to receive the property tax rebate/credit in any year it would be funded.
Taxpayers with incomes between $250,000 and $1 million would see no change and would remain eligible for the existing property tax deduction.
To pay for the new revenue needed for the middle-class and lower-income property tax relief, the state’s income tax rate for those earning more than $1 million would be increased beginning next fiscal year. The rate would go from 8.97 percent to 10.75 percent. This would impact about 16,000 out of about 2.6 million filers and raise $800 million at the plan’s full implementation in fiscal year 2016.
Also to be used to fund the plan would be the $1.4 billion from the governor’s income tax cut plan, $400 million in existing property tax rebate/credit appropriations and $300 million in existing property tax deduction expenditures.