Tax credits could replace senior freeze rebates

Change would deliver awards sooner, save N.J. money, sponsors say

By: - September 29, 2022 7:15 am

Using rebates to help seniors defray their property taxes forces too many people to wait for the financial aid, say two lawmakers who want to change how the program works.

Lawmakers will weigh a pro-efficiency reform to a popular tax break for New Jersey seniors and residents with disabilities on Thursday.

A Senate panel will consider two bills sponsored by Sens. Shirley Turner (D-Mercer) and Vin Gopal (D-Monmouth) that would deliver awards made under the state’s senior freeze program as tax credits instead of rebates, a change proponents say would provide relief quicker and with fewer costs to the state.

The senior freeze program is meant to lock in property tax rates for eligible property owners, with the rebate making up the difference between their current property tax bill and the bill from the year they moved into their home.

But there’s a catch. Because New Jersey doles out senior freeze awards as rebates, elderly and disabled residents must still pay their full property tax bills, and depending on when a resident files their application, they may not see their rebates for months.

“It’s like a day late and a dollar short because you don’t get the benefit of the check until the following year,” Turner said.

Senior freeze applications for 2021 tax filings close on Oct. 31, and those who apply now could be waiting until December to receive their rebates.

“Imagine seniors on a fixed income. They’ve got to pay their property tax, and they’ve got to wait for a reimbursement to be available to them,” said Gopal. “It just seems like a lot of bureaucracy in the middle. That’s what this bill is correcting.”

Under the plan proposed by Gopal and Turner, eligible residents would pay their first two quarter property tax bills, then receive credits that would lower the third and fourth quarter bills.

The average property tax bill in New Jersey was $9,248 in 2021, and, according to the Tax Foundation, a right-leaning Washington, D.C.-based think-tank, the state has the highest property tax rates in the nation.

The nearly 161,000 New Jerseyans who were approved for a senior freeze rebate in 2020, the last complete year, received an average rebate of $1,192.

“I know in my office, I continually hear people — particularly senior citizens — complaining about their property taxes, how high they are,” Turner said.

The Turner and Gopal bills would apply tax credits directly to third- and fourth-quarter property tax bills in equal parts and would still require residents to apply to receive an award.

The measure would also require the director of the Division of Taxation to delay the application deadline for residents who failed to file because of medical issues. 

It’s not clear how much transitioning to a tax credit would cost the state. The Office of Legislative Services has not attached a fiscal note to either bill.

The office drafted a fiscal note for a version of Gopal’s bill introduced in the previous legislative session but was unable to forecast its impact on state finances in previous sessions, noting only that it would likely reduce administrative costs related to rebate postage.

A long road

Transforming the senior freeze program has been a long-standing goal for Turner, who first introduced a version of her bill nearly a decade ago, in 2013.

But past versions have almost ubiquitously failed to advance as far as a committee hearing.

A version of the bill Turner and Sen. Fred Madden (D-Gloucester) sponsored during the 2018-2019 legislative session unanimously advanced through the Senate Community and Urban Affairs Committee but stalled after it was referred to the chamber’s budget panel.

“That’s where all the bills go to die, in budget,” she said.

But the senator said she is hopeful the measure would move in the current session because “apparently somebody believes it’s worthy of passage.”

Though the bills are set to sail through the Senate Community and Urban Affairs Committee on Thursday — where Sen. Troy Singleton, the committee chair, said the two bills would be combined through a committee substitute — the fate of their Assembly counterparts is less clear.

Neither the Assembly Aging and Senior Services Committee, where the Republican-sponsored Assembly counterpart to Turner’s bill was referred, nor the Assembly State and Local Government Committee, which is supposed to hear a version of Gopal’s bill sponsored by Assembly Democrats, had hearings scheduled as of Wednesday afternoon.

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Nikita Biryukov
Nikita Biryukov

Nikita Biryukov most recently covered state government and politics for the New Jersey Globe. His tenure there included revelatory stories on marijuana legalization, voting reform and Rep. Jeff Van Drew's decamp to the Republican Party. Earlier, he worked as a freelancer for The Home News Tribune and The Press of Atlantic City.