Property tax burden heavier under Christie than Corzine

Posted: May 08, 2013

Net property taxes in New Jersey rose 22.4 percent in Gov. Christie's first three years in office, compared to 6 percent in Democratic Gov. Jon S. Corzine's last three years in office, a New Jersey Spotlight analysis shows.

Christie has been touting his record of holding down overall property tax increases. But when his rebate reductions are factored in, his property tax record is not so clear-cut.

While Corzine doubled average property tax rebates from 2006 to 2009 and provided rebates to families earning as much as $250,000, Christie sharply cut rebate payments and limited eligibility for non-seniors to those earning $75,000 or less.

As a result, average net property taxes - the actual cost of property taxes for the average New Jerseyan after rebates are deducted - rose from $6,244 in 2009, Corzine's last year in office, to $7,645 in 2012, Christie's third year in office, state Department of Community Affairs data show.

In contrast, net property taxes rose just $350 from $5,894 to $6,244 in the previous three years under Corzine because of large rebate increases.

The net increase in actual out-of-pocket property tax payments by New Jersey residents occurred even though the 2 percent cap and other policies pushed through by Christie and Senate President Stephen Sweeney (D., Gloucester) limited the actual growth of property tax bills to just 8.3 percent from 2009 to 2012, compared with a 12.95 percent increase in Corzine's last three years.

Treasury Department officials did not respond to requests for comment. Christie has repeatedly pointed to the lower percentage growth in property taxes during his administration as evidence that the 2 percent cap and other policy changes, including pension reform, are holding down New Jersey's highest-in-the-nation property taxes.

However, David Rousseau, budget analyst for New Jersey Policy Perspective, and Henry Coleman, a Rutgers University political scientist who served as executive director to the State and Local Expenditures and Revenue (SLERP) Commission under Republican Gov. Thomas H. Kean in the mid-1980s, said it was important to look at the net property taxes paid by different income groups.

"The real impact of these policy changes is that the property tax burden on the middle class has increased exponentially with the virtual elimination of rebates," said Rousseau, who was state treasurer under Corzine. "But on upper-income people, there has been no impact."

In fact, one of the biggest side-effects of Christie's rebate reductions is that the wealthiest 2 percent of New Jerseyans - those earning more than $500,000 - have been receiving more property tax relief from the state government for the last three years than the overwhelming majority of residents.

That is because while Christie has cut property tax rebates, the GOP governor left the income tax credit for the first $10,000 of property taxes untouched. That tax credit is worth $897 to New Jerseyans in the top tax bracket, but a maximum of $245 to a New Jersey family making $50,000 to $70,000.

With rebates for non-seniors cut to an average of $409 under Christie, the vast majority of families receive less property tax relief than the rich - in sharp contrast to 2007 to 2009 when property tax rebate checks alone averaged $1,100 for those earning up to $150,000, according to state Treasury and Community Affairs department reports.

A family earning the typical Hamilton Township income of $72,020 and paying the average property tax for that Mercer County municipality of $4,533 in 2006 (the year on which all rebate payments are calculated) received a $907 rebate under Corzine in 2008, but only a $302 rebate last year; with the income tax deduction on property taxes added in, that family received $1,092 in direct property tax relief from Corzine and $490 under Christie.

Corzine increased direct property tax relief from $1.31 billion in Democratic Gov. Richard J. Codey's last budget to $1.71 billion in his first budget for fiscal year 2007, $2.85 billion in 2008, and $2.52 billion in 2009.

The increased funding enabled Corzine to provide a 20 percent credit on the first $10,000 in property taxes to an estimated 1.23 million homeowners earning up to $100,000, for an average rebate of $1,115 in 2007 and 2008 - almost twice the $592 average rebate provided by Codey.

The 325,000 homeowners earning between $100,000 and $150,000 received credits for 15 percent of property taxes, which translated into an average rebate of $960 in 2007 and a 10 percent credit worth an average rebate of $665 in 2008.

In 2007, before the recession hit, Corzine also provided rebates worth an average of $745, based on a 10 percent credit, to 206,000 homeowners earning between $150,000 and $250,000.

But Corzine lost his reelection bid to Christie, and the Republican governor found himself wrestling with a $2.2 billion budget gap as the state's revenues bottomed out in the spring of 2010 in the aftershocks of the Great Recession, which began officially in December 2007 and ended in June 2009.

As part of his budget solution, Christie cut $848 million out of the $1.173 billion Corzine had appropriated for property tax rebates in early 2010.

Corzine had eliminated income tax rebates for the wealthiest 2 percent of New Jerseyans in 2009 as part of the one-year "millionaire's tax" surcharge he imposed on those earning above $400,000.

But Christie refused to extend the "millionaire's tax" to fund a restoration of property tax rebates and left the income tax credit for property taxes in place for all residents.

Compared with Corzine, Christie's rebate program for 2011, 2012, and 2013 cut rebates in half for non-senior homeowners earning up to $50,000 by providing a maximum 10 percent credit on the first $10,000 in property taxes, and chopped rebates by two-thirds to a maximum 6.67 percent credit for homeowners making $50,000 to $75,000. Those two groups received an average rebate of $407.


Read the full version of this story at www.njspotlight.com

 

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