Thaw for Senior Freeze Property-Tax Relief Frozen Out of 2018 Budget

In the past, Democratic lawmakers have tried to block the income-cap change, but Christie, a second-term Republican, has used the line-item veto pen to override their wishes. But this year, Democrats prioritized increased funding for local school districts and several other programs in a budget showdown with Christie, leaving the frozen senior-freeze income cap in place for another year. That means it will likely be up to the state’s next governor to determine whether New Jersey seniors will eventually be made whole.

Freezing property-tax bills

The Property Tax Reimbursement Program’s “senior freeze” nickname comes from the program’s use of state-funded reimbursement checks to effectively freeze property tax bills each year for thousands of longtime New Jersey seniors and disabled residents.

To qualify for the program, which started in 1997, homeowners must be at least 65 years old or disabled, and be at least a 10-year resident of the state. They also have to be the owners of their residence for the past three years and be up to date on their property taxes.

The state law that created the reimbursement checks established an income ceiling for the program, and it is supposed to rise with the cost of living, like Social Security benefits. Under the law, the ceiling should be set at $87,007, but it has instead been held flat at $70,000 for the past few years, using the fine print inserted into the annual state budget. That fine print is authorized under the state constitution’s balanced budget clause, which allows governors and legislators to suspend laws that call for specific appropriations if it means keeping overall spending in line with revenue projections.

Earlier this month, Christie signed into law a $34.7 billion budget for the 2018 fiscal year that included $200 million for the senior-freeze program. That’s projected to be enough money to cover reimbursement checks averaging $1,401 for an estimated 138,200 existing senior-freeze recipients; and checks averaging $219 for 25,100 expected newcomers to the program. But the budget language made sure the income ceiling will continue to be $70,000 instead of the $87,007 limit called for in statute. It’s unclear exactly how many seniors will be affected by the change.

Last year, Democrats who control the Legislature tried to increase funding for the senior-freeze program by sending Christie a budget bill that included an additional $45 million that would have been used to lift the income ceiling to the statutory level. But Christie used the line-item veto to remove that spending item and many others. This year, the senior-freeze program was not one of the extra spending items that the Democrats pressed for when they sent Christie a fiscal 2018 budget bill with numerous add-ons, including $150 million in additional aid for K-12 school districts.

Help on the way?

But more help could be on the way as the top candidates who are running for governor this year are already calling for increased property tax relief as part of their respective platforms. And those campaign promises come as survey results released earlier this month by Monmouth University’s Polling Institute indicated a full 50 percent of New Jersey’s registered voters consider property taxes to be the state’s most important issue, easily beating out other issues like education and jobs for the top spot.

Democrat Phil Murphy, the gubernatorial contest’s frontrunner, has proposed boosting state funding for existing property-tax relief programs as part of his overall affordability platform. He’s also promised to fully fund the state’s school-aid law in phases over the course of several years to help ease the burden on school taxes, which typically make up the largest portion of an individual homeowner’s property-tax bill in New Jersey. Asked for comment on the ongoing adjustment of the senior-freeze program’s income ceiling, Murphy spokesman Derek Roseman pointed a finger at Republican candidate Kim Guadagno, who is Christie’s lieutenant governor.

“Once again, Chris Christie and Kim Guadagno have pulled the rug out from underneath countless seniors who won't get the property tax relief they deserve," Roseman said.

But Guadagno is making property-tax relief a central issue for her campaign this year. She’s proposed the creation of an altogether new “circuit-breaker” tax-relief program that would ensure many households would pay no more than 5 percent of their annual income on school taxes.

Guadagno spokesman Ricky Diaz promised the campaign would study the senior-freeze issue more closely, but also said Guadagno “has proposed a robust plan to cut property taxes that is specifically geared towards helping seniors and the middle class.”

“In contrast to Phil Murphy, who doesn’t have a plan to reduce property taxes, Kim Guadagno has made it the cornerstone of her campaign to create a more affordable New Jersey,” Diaz said.

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