State to delay $400M in property tax relief
TRENTON – Thousands of senior citizens and the disabled will not be seeing any property tax relief this year despite the promise from the administration of Republican Gov. Chris Christie to deliver the money in August.
State Treasurer Andrew Sidamon-Eristoff told lawmakers Wednesday that nearly $395 million in property tax relief to residents will be delayed by nine months in an effort to help manage an expected revenue squeeze when the new fiscal year arrives in July. State officials will wait until May 2015 to give the money back to residents through credits on property tax bills.
Democrats said the change isn’t fair and fretted that next year the Christie administration could further delay the payment or bank the money, if the state’s economic recovery continues to fizzle.
“I think that we’ve seen any number of tricks and procrastinations by this administration and there is little if anything that would shock me at this time,’’ said Assemblyman Gary Schaer, chairman of the lower house’s budget panel where Sidamon-Eristoff delivered the news.
But Sidamon-Eristoff said that it’s the “current expectation’’ that the tax relief “will be paid at end of the next fiscal year.’’
The Homestead Benefit Program is for homeowners age 65 or older, or blind or disabled, who have less than $150,000 in income. Other tax filers with income under $75,000 also are eligible.
The change “is appropriate from a cash-management standpoint,’’ Sidamon-Eristoff said. “We want to be sure that we have sufficient flexibility to handle any adverse cash results at the end of the fiscal year. It’s prudent under those circumstances for us to take this major expenditure and budget it at the end of the fiscal year.’’
The state’s property-tax relief program has been whittled down over the years so that it is aimed at the elderly and disabled. The amount given back also has been cut back. For example, in Wall, the average benefit for senior citizens averaged $567 last year, down from a high of $1,292.
It was the second straight day of fallout from the state’s budget crisis. Christie on Tuesday said that he planned to cut the state’s payment into the public employees’ pension systems by nearly $2.5 billion over the next 14 months to help close the gap.
The pension cutback has led both the New Jersey Education Association and the Communications Workers of America to announce they would sue Christie in an effort to force the full payments.
Christie said he wasn’t flinching.
“I make the decisions that I believe are the right thing to do. They want to sue? The courts are available to them. They want to protest? The First Amendment is available to them,’’ Christie said at a news conference on an unrelated topic Wednesday. “I took a lot of time examining this issue and, given the circumstances that we’ve been confronted with, I believe this is not only the best but the only decision we’re left with to deal with the magnitude of the problem.’’
The 2011 pension reform bill gave public workers the right to sue if the agreement to fund the pension was not kept.
“This is a pretty big gamble to take if it’s not legal,” Assemblyman Troy Singleton, D-Burlington, said at the hearing.
Sidamon-Eristoff asked Singleton if he would rather see hospitals and schools shut.
“We have to deal with the here and now,” the treasurer said. “I would like to do more. You would like to do more. But we don’t have the resources.”
Christie, at his news conference, didn’t mention the plan to delay the property-tax relief credits, which was not known publicly until Assemblyman John Burzichelli asked Sidamon-Eristoff about it.
Burzichelli, a Gloucester County Democrat, said the news comes on short notice for recipients.
“People are going to get their tax bill in August and that credit is not going to be on there, increasing their tax in some cases by $400 or $500. It’s very unhelpful and it’s going to be a burden on people who were expecting their first quarter taxes to be reduced by this very important program,’’ Burzichelli said.
Senate President Stephen M. Sweeney noted that Christie has declined to endorse a millionaires’ tax but is tinkering with pensions and the Homestead Benefit Program.
“It’s hurting middle-class people again. It’s not the wealthy who are depending on that. You can see a pattern in that and it’s been the same for 4½ years. He cares about a certain group. The other group, he doesn’t. He’s been very consistent. One group is off limits and there’s another group he doesn’t have a problem with going to over and over again,’’ Sweeney, a Democrat, said.
Democrats also blamed the Republican governor’s administration for downgrades of New Jersey’s credit ratings by Wall Street, making it more expensive to borrow money.
“The problem I have with this budget is that there is no planning,” Schaer said.
Meanwhile, NJ Transit officials said fares will not increase despite a decreased state subsidy.
“NJ Transit has previously announced plans for a balanced, fiscally sound budget which holds fares stable for a fifth consecutive fiscal year,” said John Durso, an NJ Transit spokesman. “Our customers can be assured that these plans have not changed and they will not change.”