Everyone likes rebates, especially if it’s applied to a tax bill. You do the math in your head and recognize that though you’re obligated to pay the tax, the rebate – it’s money in your pocket – eases the pain of paying. Simply put, rebates do put some money in taxpayers’ pockets, but they don’t necessarily lower property taxes.
Rebates offer a benefit because they can serve as an incentive (you bank rebates), or you can direct them toward that perennial tax bill that arrives. That’s good for consumers and taxpayers. But the fundamental flaw with rebates, especially when we apply them to taxes, is that they can usually happen once. In most instances, you can’t keep going back year after year and benefit from a tax rebate.
There is also a powerful psychological component that might tempt taxpayers to redirect money from the rebate to a purchase that is less compelling. For example, from a consumer spending perspective, unless you’re fiscally stern, does the rebate actually go toward the impending tax bill, or do you spend it on something frivolous or a personal perk you’ve always wanted? After all, some might consider it free, found money.
Simply put, rebates do put some money in taxpayers’ pockets, but they don’t necessarily lower property taxes.
And then comes the next property tax bill, the one that drives you nuts. You’ve spent the rebated money and yet must still pay it and do so grudgingly.
Let’s understand the background that too many New Jersey homeowners must face. Our homeowners pay the highest property taxes in the United States, and the average bill statewide hit $9,284 in 2021, an increase of $172 over the previous year. In addition, renters currently face historic rent increases. This matters because when property taxes rise, landlords pass along a portion of those seemingly inevitable higher costs to renters.
High property taxes and rental increases generate one of the most frequent and vociferous discussions in New Jersey diners: Whether you’re a homeowner or a renter, you’re paying more in property taxes.
Through my term in office, I have sought ways to reduce this inexorable burden. This is why I have sponsored several bills that serve as a partial remedy. They include:
Senate Bill 330. My bill would increase aid from the Energy Tax Receipts Property Tax Relief Fund over the next two years. This would, in turn, require municipalities to reduce local property taxes correspondingly.
- Senate Bill 343. This bill addresses the inequities that many renters, who are also taxpayers, must pay. My bill would increase the tax deduction for renters from 18% to 30%. Housing is one of the most expensive costs of living in New Jersey, and the rental market continued an upward climb during the pandemic. This deduction translates into a $130 million tax cut for those who need it the most; working and low-come families.
These measures seek to not only reduce the property tax burden on our families but provide much needed savings for renters. This is direct tax relief to cities and towns throughout New Jersey that will help ease the burden for homeowners and businesses, and the higher deduction will produce real savings for tenants. Both of these proposals have passed the Senate and are awaiting action in the Assembly.
It is fiscal relief our citizens deserve, and both are important steps in the right direction for easing the burden of escalating property taxes.
That’s my take, what’s yours?