N.J. Seniors Fear Gov. Christie’s Proposed Cuts To Property Tax Rebates

senior tax rebatesEver since the first check was cut 33 years ago, New Jersey residents — and their governors — have had a tumultuous affair with property tax rebates. The annual checks have been trashed as an election-time gimmick, prized as a solution to a complex problem and treated as sacred in many state budgets. This year, the relationship may be over. For the budget year beginning July 1, Gov. Chris Christie has proposed slashing the rebates by 75 percent — and more radically, replacing them with quarterly credits on residents’ tax bills. The first credits — an average of $316 for senior and disabled homeowners and $198 for other homeowners earning $75,000 and below — wouldn’t show up until April 2011, meaning there would be no fall ritual of mailing checks.

The change is only beginning to sink in among the state’s senior citizens, who are the most vocal about their reliance on the checks.  

“It used to almost pay a quarter of my taxes. It helped a lot,” said Joan Molzon, a 71-year-old Wall Township retiree whose previous annual rebate was around $1,200. “Is he trying to pacify the seniors with a token?”

And it’s testing state officials charged with revamping the program as they confront logistical questions and privacy concerns surrounding the switch. Those same questions have led to false starts under previous governors who pledged to make the change.

Christie, though, says the checks have too often been used “to make sure people in Trenton get re-elected” and that with credits, the state will save more than $10 million in financing and printing costs. He said if his property tax reform package — including a 2.5 percent constitutional limit on annual increases — is passed into law, residents won’t be so reliant on rebates.

“I believe it will work, and if it does work, that’s real permanent property tax relief to people,” the Republican governor said, “and not the kind of Band-Aids of these other programs that really are only temporary fixes.”

Even the checks’ creator, former Gov. Brendan Byrne, thinks their time is up.

“I don’t apologize for having started the property tax rebate, because it was an educational process, but I don’t think we need the education anymore,” said Byrne, a Democrat who served two terms. “Between now and then, I think we’ve come to the point where if you can reduce property taxes, you do it directly, you don’t do it by gimmicks.”

Byrne hand-delivered the first check in 1977, when rebates were considered a simple way to show the just-passed income tax was being used for property tax relief. Since then, both the value of the rebates and taxpayer eligibility have fluctuated depending on the state’s economic health and the next election cycle.

Christie is not the first to propose a direct credit instead, with governors and lawmakers of both parties floating the idea since the early 1990s. Most recently, former Gov. Jon Corzine pushed for the change in 2007. But Corzine reversed course midway through the budget process, citing concerns with keeping homeowners’ personal financial information private. That fall, checks went out.

“I give Christie a lot of credit for trying to get away from it,” said Marilyn Askin, longtime state AARP president and now a lobbyist for the group. “But the older people still like the checks in their hand … There’s got to be some kind of bridge, because too many people on fixed incomes live from hand to mouth.”

Helen West, 84, said she and her husband, Frank, use the money to help offset the $7,000-plus annual property taxes — about the state average — on their Carteret home. She dismissed Christie’s talk of long-term reforms (“I have heard that every time”) and said she’ll have to “scrimp” to get through this year.

“I’m not poor. We’ll do without something else,” West said. But, she added, “I just don’t feel he’s being fair.”

Christie stressed he is keeping in place a separate program called Senior Freeze, which reimburses the difference between the amount of property taxes seniors and those with disabilities paid when they enrolled and the amount paid in the current year. However, the program this year would not send checks to new applicants and would keep reimbursements for those returning at last year’s level under Christie’s budget proposal.

The Legislature — where ruling Democrats have pushed for higher taxes on millionaires to give seniors their full rebates — would have to pass a bill to accomplish the conversion to credits.

The administration is working out other issues, including how to protect privacy and whether to use someone’s 2010 or 2011 income to determine whether they are eligible for the credit, Treasury spokesman Andrew Pratt said.

“The credit isn’t going to be given for many months yet, so there’s no sense of panic,” Pratt said. “None of this is set in stone, but it’s just a matter of how you do this in the best possible way.”

And if there are insurmountable problems, he said, the state can always revert to sending out checks. Star Ledger

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