Christie of "balancing the budget on the backs of the people struggling to stay and live in New Jersey."
Christie's NJ budget delays property tax rebate again, angering seniors
By Brent Johnson/The Star-Ledger
on July 10, 2014
TRENTON — Amid the debate over taxes and pensions cuts, at least one aspect of the $32.5 billion budget that Gov. Chris Christie signed less than two weeks ago was virtually overlooked in the shuffle. And it's one that will affect hundreds of thousands of residents right away.
They’ll have to wait another nine months to receive their homestead property tax rebates.
The elderly, the disabled, and low-income homeowners enrolled in the state’s Homestead program were supposed to receive an annual credit on their property tax bill in August. But faced with a $1.7 billion budget shortfall, Christie moved the credit until May of next year — 21 months after the last rebate.
That means the state won’t have to come up with $395 million in rebates until next spring.
"It’s important to be paid, but I think it’s also important to us how we manage our cash," Christie said at a news conference back in May. "When you’re running out of money, you’ve got to manage your cash carefully, You’ve got to prioritize your bills and decide which ones you absolutely must pay."
As he put it: "If I wanted to eliminate it, I would have just eliminated it. I did that before, in 2010."
Still, this is the third time in Christie’s five years as governor that he has delayed the rebate. Democratic lawmakers and elderly residents said this would make it even more difficult for those living on a fixed income in a state already one of the most expensive in which to reside.
State Assemblyman Jon Burzichelli (D-Gloucester) called the rebates the "best tool the state has for property tax relief."
"To the taxpayer, a couple hundred dollars here and there makes a difference," Burzichelli said. "This means they have to reach into their pockets and pay more for their taxes."
More than 1.8 million New Jersey residents are eligible for the program. The average rebate is $516 for elderly and disabled homeowners earning less than $150,000 a year. Homeowners with incomes under $75,000 will get back an average of $402.
Robert Bernesser, an 81-year-old disabled veteran who fought in the Korean War, said he counts on the rebate to help offset $10,000 in property taxes on his Mahwah home. But the delay will cause him and others like him to cut back — possibly cutting back on the expensive prescription drugs they must to take.
"If they are supposed to take two pills a day, they take one," Bernesser said. "If they want to visit their kids, they might not go every couple of weeks but once a month. It’s a quality of life issue."
The homestead rebate — instituted by Gov. Brendan Byrne in 1977 after the state passed an income tax — has been a source of debate for years.
Initially, the rebate was sent in October, just before Election Day. After he took office in 2010, Christie said the checks had often been used "to make sure people in Trenton get re-elected."
Instead, the Republican governor promised to reform the entire property tax system so that residents wouldn’t have to rely on programs that work as "Band-Aids" and "temporary fixes." He also stopped sending out the rebate in check form — saving on printing and mailing costs — and instead included the credits on tax bills.
Christie and lawmakers have since ushered in a 2 percent cap on property tax increases and the amounts police and fire unions can win in arbitration. That has helped property taxes rise only 9.7 percent during Christie’s first four years, compared with 14.1 percent under his predecessor.
The average New Jersey resident paid nearly $8,000 in property taxes last year.
Christie eliminated the homestead rebate in 2010 when he was faced with a budget crisis but restored it the following year. Last year, he delayed the rebate by several months when he was faced with another gap.
This year, Christie’s administration was looking at a $1.7 billion shortfall heading into the start of the fiscal year July 1. Democratic lawmakers argued that the state should make up the difference by instituting more than $1 billion in tax increases on wealthy residents and businesses.
Instead, Christie vetoed the tax increases and signed a spending plan that closed the gap by reducing the New Jersey’s contribution to the public-worker pension system.
Delaying the rebate was designed to give the state more flexibility with cash flow. "It’s appropriate from a cash-management standpoint," state Treasurer Andrew Sidamon-Eristoff told the Assembly budget committee in May.
In all, homeowners have received only $1,188 under the three credits given out during Christie’s term — compared with an average of $4,247 under his Democratic predecessors, according to the nonpartisan group NJ Spotlight.
Doug Johnston, a spokesman for AARP, accused Christie of "balancing the budget on the backs of the people struggling to stay and live in New Jersey."
"The delay is probably just seen as an accounting maneuver in state offices," he said, "but it’s an accounting maneuver that increases pain and delays relief for seniors struggling to maintain independence."
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