HADDONFIELD – When Margaret Smith’s health started to decline, she worried most about her disabled daughter who has lived in the family home for nearly seven decades.
Margaret Smith died in 2003. A trust was put in place so that Alice Smith, who contracted polio as an infant, leaving her physically and mentally disabled, could stay in the home her parents purchased in 1951.
But tax debt may soon force the woman out.
“My grandmother was getting older and knew her health was failing. She had said it multiple times, Just make sure Alice is OK,'” explained Mark Smith, Margaret Smith's grandson and Alice Smith’s nephew. “That was her big thing. It’s tragic to see what’s going on right now.
Rising property taxes have put Alice Smith, 68, in a financial bind. Her older brother Jack Smith — Mark’s father — is trying his best to prevent the house from being lost to tax foreclosure.
The house is paid for, but Alice Smith’s annual income of $17,150 from Social Security and her father’s pension isn’t enough to pay the approximate $8,500 in annual property taxes along with other expenses she has.
“I’ve been here nearly all my life,” Alice Smith said. “I love everything about the house, I love my neighbors. This house means everything to me. I want to live here for the rest of my life until the day I die.”
Regular caregivers, home health aides, neighbors and her family help look out for Alice, who is wheelchair-bound.
On a recent Friday morning, she and a caregiver greeted a Courier-Post reporter at her two-story home in the middle of a quiet street.
Smith's hospital bed sits in the corner of the living room, which also houses an electronic piano she plays, family photos, and puzzles she does during the day.
Smith said she has many fond memories in the home, including tending to a garden out back where she grew a variety of vegetables. She also remembers a beautiful rose garden out front, although she didn’t like getting scratched when she pruned it.
“I remember growing up here, going to school, having my dogs and having animals here,” she said. “Me working in the vegetable garden, which I had out back. I loved that.”
Smith said she turned her father’s azalea garden into a vegetable garden after he passed away. A neighbor taught her how to have a “big garden with very little space." She grew tomatoes, peas, lettuce, corn, squash, peppers, onions and more.
“I froze a lot of the vegetables and we ate them in the winter, my mom and I,” she said.
While Smith's brother, who has lived mostly in Peru for years where he works on mining projects, has helped pay the taxes before, he’s no longer able to do so. He’s trying to get a reverse mortgage for the home to take care of the back taxes and future taxes.
“I tried knocking on every door I could since the injustice of the situation is so egregious,” Jack Smith told the Courier-Post via email. “My parents wanted to be sure that she could always stay in the house that they worked and saved for. They ensured that there would be no mortgage on the house.
“After their death, they instructed that the house be placed into a trust as a means of protecting Alice’s right to live there until her death or inability to continue to live there, due to her own decision or some other circumstance. They had no idea that property taxes would climb so high as to threaten her ability to stay in that home.”
In a commentary published in the Courier-Post, Assemblyman Troy Singleton, D-Burlington, wrote “New Jersey, whether we like it or not, serves as the nation’s poster child for high property taxes, and this is due to a complex number of reasons.”
Singleton, who has introduced several bills to try to address the issue, later told the Courier-Post that the issue Smith is facing is “being played out in communities all across New Jersey.” He said he’s been consistent in his efforts to work with his colleagues “across party lines to address this with a variety of concepts to lessen the bite of property taxes on our family budgets.
"It is my hope that Gov. (Chris) Christie, Senate President (Stephen) Sweeney and Assembly Speaker (Vincent) Prieto come together to enact meaningful property tax reform this year. Through those initiatives or some other impactful measures.”
According to the New Jersey Department of Community Affairs, the average property taxes across the state in 2016 were $8,549, while they were $6,377 in Camden County, where Alice Smith lives. Haddonfield's average property tax for residents in 2016 was $14,275.
Mark Smith lives in Virginia where he serves as a U.S. Capitol police officer, but he has tried to help his father out since he’s doing a lot from out of the country. The main order of business right now is trying to get the reverse mortgage nailed down, but the home was built in 1940 and is not up to code and “all this work needs to be done” before they’ll do the reverse mortgage, he explained.
The family estimates it will cost $14,500 to bring the home up to code. A crowdfunding campaign was started to try to raise the money.
“With all avenues seemingly exhausted, my father and I are trying to raise funds to pay the $14,500 via GoFundMe as a last resort before the courts take her house away,” Smith said.
To date, nearly half of the funds have been pledged.
“Because we’ve raised money, we’ve shown evidence that we’re making our way toward the reverse mortgage, the investment company agreed to hold off for another 30 days or a month or so, until the beginning of March.”
Smith said they did look into the Senior Freeze Program, which according to the state website, reimburses eligible New Jersey residents who are senior citizens or disabled for property tax increases on their principal residences.
“The issue is you have to be current on your taxes,” Smith said.
Jack Smith said his feelings are “very strong” on the issue because he feels that the “tenets of social justice and basic fairness are not currently addressed in the tax code.”
“The current state financial relief efforts are solely focused on assisting persons with problems of mortgage delinquencies from foreclosure, and not on protecting fully disabled or elderly persons with delinquent tax payments from foreclosure,” he said.
“So the state is failing in its fundamental obligation to protect the most vulnerable and defenseless – the fully disabled and elderly.”
Mark Smith said he was sickened when he learned the way things work in the state of New Jersey with tax foreclosures.
State law requires the tax collector in all 566 municipalities hold at least one tax sale per year, if the municipality has delinquent property taxes and/or municipal charges. At tax sale, third parties and the municipality bid on the tax sale certificates, with the highest bidder paying the outstanding taxes and taking ownership of the tax sale certificate, which means they now hold a lien against the property in the amount of the certificate and any interest.
“What happens is, the state of New Jersey says, ‘OK you’re not paying your taxes, we’re going to refer this to an investment company to pay off your back taxes to us,'” he said. “After a certain amount of time if you don’t pay them back plus interest, they can refer it to foreclosure and the foreclosure sale happens and they get all the money from the proceeds of the sale.”
Realtor.com and Zillow.com estimate the house is worth between $334,000 to $368,000.
Jack Smith said the other item that’s lost in the equation is the cost of foreclosure on the state itself. He says disabled and elderly people who lose their homes in tax foreclosures and have no assets often wind up in nursing homes instead of continuing in their own homes.
According to the Genworth 2016 Cost of Care Survey, the annual fee for nursing home care in New Jersey can top $118,000 for a semi-private room or $133,000 for a private room.
“Since these people have no assets, that cost falls on the state and federal government” and ultimately the taxpayer, Smith said.
The home is the place where Jack and Alice were raised. He left New Jersey at 17 to join the military and later had a career in counterrnarcotics, which took him far away, but his sister has been there the whole time.
“My sister knows almost every square inch of the house and for all the turbulence of her disabilities, that house is her Rock of Gibraltar and the single item that gives her the strength and courage to persevere against her daily challenges,” he said.
Even a recent hospital stay due to dehydration as well as atrial fibrillation, her brother said, hasn’t deterred her from wanting to be in her home.
“I want to live here until the day I die because I grew up here,” Alice Smith said.