Your Property Taxes: Millions In Aid For Seniors, Homeowners On Chopping Block

Seniors and low- and middle-income New Jersey residents will pay more on their property tax bills in the coming months under Gov. Phil Murphy's plan to cut two aid programs to balance the coronavirus' crushing blow to state revenues.

Murphy and his financial advisers propose cutting a $220 million payment for Senior Freeze and $138 million for the Homestead Benefit program as they aim to cut or delay $5 billion in spending over the next three months.

If it is approved by the Legislature, Murphy's plan means checks that go out to Senior Freeze participants typically in July won't arrive in mailboxes this summer, and people eligible for the Homestead Benefit tax credit would see increases on their upcoming tax bills.

That's unwelcome news for residents like Melinda Granieri, who relies on the programs to pay taxes on the home where she's lived for about 50 years.

“It’s really helped me to be able to stay in my home," said Granieri, 78, of Milltown in Middlesex County. Not receiving the money from Senior Freeze "creates a very big hole," she said.

That's unwelcome news for residents like Melinda Granieri, who relies on the programs to pay taxes on the home where she's lived for about 50 years.

“It’s really helped me to be able to stay in my home," said Granieri, 78, of Milltown in Middlesex County. Not receiving the money from Senior Freeze "creates a very big hole," she said.

The two programs combined help about 680,000 residents annually shoulder their highest-in-the-nation property tax bills. Last year, New Jersey's average bill was $8,953.

Murphy's plan must be approved by the Legislature, which has to pass a budget for the next three months by the end of June. Typically the state's fiscal year ends June 30, but the date was moved this year to Sept. 30 because of the public health crisis.

Kevin McArdle, a spokesman for Assembly Speaker Craig Coughlin, D-Middlesex, and who in the past has pushed Murphy to restore spending on direct property tax relief, said lawmakers are reviewing Murphy's proposal.

"Like every year, property tax relief is a core component of the state's budget and the Speaker will fight to ensure as much relief as possible is sent directly or indirectly back to the property taxpayers," McArdle said. "It is simply premature to say what will and what will not be cut."

Once that budget is approved, Murphy's team will send the Legislature another spending plan for the shortened October-to-June 2021 fiscal year. It's unclear if that will include money for the Senior Freeze and Homestead Benefit because the financial wreckage of coronavirus shutdowns is expected to be lasting. Maher Muoio has said the state faces a $10 billion revenue shortfall this year and next. 

“As we have noted many times, the extraordinary fiscal situation we have been confronted with has necessitated many difficult and unfortunate decisions," said Jennifer Sciortino, a spokeswoman for the Department of the Treasury. "Without additional and flexible federal aid or authorization for emergency borrowing, the state’s options will become even worse.”

The Homestead Benefit program, which pays municipalities that then credit residents' tax bills, is open to homeowners of all ages who meet certain income and residency requirements. The average credit was $255 in 2017, according to state tax data.

Because the state previously froze the program, many residents did not see the credit on their May tax bills. And because of how long it takes the state to process the credits before they appear on your bill, not funding the program in the next three months means residents won't see the credit on their August or November bills, either.

The Senior Freeze program reimburses senior citizens and disabled residents who meet certain requirements for increases in their property tax bills over a period of years. The average reimbursement was $1,190 in 2018, according to state tax data.

In cutting the programs, Murphy reverses course from February, when he touted his administration's accomplishments to slow the climb of the state's property taxes, an issue that is a top concern for voters. Murphy pointed to the programs as crucial help for middle-class families and seniors, and said that his team was "more effective in combating our property tax crisis than any administration that has come before." 

But that was about a week before the state announced its first case of coronavirus and now he's proposing pulling back the property tax relief programs. Businesses and restaurants that generate sales tax revenue have been closed for months and income tax payment deadlines have been moved back, creating a hole the state must plug.

Asked recently about cuts to the programs, Murphy pointed to the financial drain of coronavirus and pushed his plan to borrow money. 

Murphy wants financial help from the federal government and to borrow at least $5 billion by issuing general obligation bonds. The Assembly approved the borrowing bill last week, which also authorizes the governor to take up to $9 billion in loans from the federal government.

But the bill's future is uncertain in the state Senate, and Republican leaders have threatened to sue if it becomes law. Senate President Stephen Sweeney, D-Gloucester, the man who decides what the Senate votes on, has been skeptical of some parts of the plan and pushed his own idea to furlough some state workers.

Asked recently about cuts to the programs, Murphy pointed to the financial drain of coronavirus and pushed his plan to borrow money. 

Murphy wants financial help from the federal government and to borrow at least $5 billion by issuing general obligation bonds. The Assembly approved the borrowing bill last week, which also authorizes the governor to take up to $9 billion in loans from the federal government.

But the bill's future is uncertain in the state Senate, and Republican leaders have threatened to sue if it becomes law. Senate President Stephen Sweeney, D-Gloucester, the man who decides what the Senate votes on, has been skeptical of some parts of the plan and pushed his own idea to furlough some state workers.

Murphy said the Assembly vote was "a huge step in the right direction to be able to put back on the books a whole range of programs" including those that lower property taxes and pay for education

Granieri, the Milltown resident, said she hoped the federal government would provide funding to save the programs.

“I am not blaming the governor or the state for the situation we’re in," she said. "I understand you can’t write checks if there’s no money in the bank. But I am also in a situation where I really depend on that money as a source of income because I depend mainly on my Social Security.” 

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