Property Tax Breaks For Vets In Retirement Communities 'Right Thing To Do'

Supporters have been trying to get legislative approval for years, but efforts have always fallen short.

New Jersey veterans should continue to receive their property-tax breaks after moving out of their homes and into continuing-care communities, agreed state Senators who approved two measures in committee that are designed to help veterans and their surviving spouses.

The unanimous passage on Thursday of S-1331 and SCR-110 by the Senate Military and Veterans’ Affairs Committee was just the first step in a long process that includes voter approval of the move via a public question that could make the ballot as early as this fall. And, while helping veterans is akin to motherhood and apple pie, the placement of a question giving certain vets these tax breaks is not a given, as supporters say they have been trying to pass this legislation for the last 17 years.

Gary Baldwin, an Air Force veteran who lives in the Seabrook Retirement Community and is council president in Tinton Falls, said the measure has been approved by committees in one or both houses but always fallen short of passage.

“We haven’t been very successful through all the years,” he said. “I’m trying like hell to live long enough to see this thing get approved. I’ve got a few years left.”

State law provides that veterans who served in active duty during war and certain other times of emergency and their surviving spouses receive a $250 property-tax deduction on their primary home. Those veterans with a wartime-related disability and their surviving spouses are exempt from paying property taxes.

Voters would need to agree

Sen. Vin Gopal (D-Monmouth) and sponsor of the measures, said a legislative change is needed to enable a veteran or spouse to continue to receive the tax benefit after moving to a continuing-care community; that’s because language in current law does not recognize that people living in these places essentially pay property taxes through their monthly assessments.

“They are investing in it, if not technically owning it,” Gopal said of an individual’s unit within a retirement community. “This is pretty basic, that the same benefit that homeowners get, they should get, too … Our veterans fought for us abroad and we need to ensure that they get this basic benefit.”

Baldwin said that part of the bill for his apartment includes a tax assessment that he pays “in twelve monthly installments to the facility.”

Because the veterans’ tax benefits are written into the state constitution, voters would need to agree to the changes at a future election, said Sen. Troy Singleton (D-Burlington), chair of the committee. He said that the cost of the deduction works out to just $21 per month.

Supporters said the effort has tended to stall in the budget committees of one or both houses, where the measures are normally heard because they would involve cost. The financial impact is somewhat unclear until the budget committees receive a fiscal analysis.

Affect some municipalities more than others?

Close to 180,000 veterans and their widows or widowers got a $250 tax break last year, according to the state Department of Community Affairs’ property-tax database, so that would result in a cost of about $50 million. There could be some additional cost to the state for those veterans currently living in retirement communities and not now getting a deduction but who would be eligible for it should voters approve the change.

But supporters of the measure argue the bill would not cost the state much more, as the $250 property-tax deduction is an expense the state is already paying.

The measure would also allow a disabled veteran or a surviving spouse who is exempt by law from paying property taxes on an owned home to instead receive an exemption from paying the share of property taxes assessed on the retirement community unit into which the vet moved. Far fewer veterans receive this exemption — about 10,200 last year, according to the property tax database — but the exemption is worth far more because it absolves a vet from paying any property taxes.

The total cost of that exemption is not available, but if each veteran was paying the state’s average property-tax bill, it would total some $88 million. This exemption is not covered by the state, but is subsidized by the other taxpayers in each municipality, so allowing veterans to receive this break when moving from one town to a retirement community in another would involve a cost shift, noted Robert McNulty of the Fleet Reserve Association Branch 13.

That shift could wind up impacting municipalities with a larger number of these retirement communities. Already, municipalities that currently have a lot of veterans’ exemptions have been looking for compensation from the state. For instance, Berkeley Township in Ocean County, which had 216 veterans and widows or widowers exempt from paying property taxes last year, passed a resolution earlier this year urging the Legislature to pass another bill, S-314, that would have the state reimburse municipalities for the amount of the mandated tax exemption for disabled veterans.

“This is not going to be a big expense on anybody,” said McNulty, adding he thinks the state should reimburse towns for the exemptions. “It’s the right thing to do for the right reasons.”

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