Sponsored by:
Senator RONALD L. RICE
District 28 (Essex)
SYNOPSIS
Allocates 20 percent of each homestead rebate to claimant’s resident municipality.
CURRENT VERSION OF TEXT
As introduced.
An Act reserving 20 percent of a claimant’s homestead rebate for the municipality in which the claimant resides and amending P.L.1990, c.61.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 7 of P.L.1990, c.61 (C.54:4-8.63) is amended to read as follows:
7. The State Treasurer annually on or before October 31, upon certification of the director and upon warrant of the State Comptroller, shall pay and distribute 80 percent of the amount of a homestead rebate payable under this act that is claimed for the prior tax year to each claimant whose rebate is approved by the director. The State Treasurer shall pay and distribute to the municipality in which the claimant’s homestead is located the remaining 20 percent of the amount of a homestead rebate payable to the claimant under this act.
(cf: P.L.2004, c.40, s.8)
2. This act shall take effect immediately and shall apply to homestead rebates payable thereafter.
STATEMENT
This bill provides much needed additional aid to municipal governments by directing to the claimant’s resident municipality 20 percent of the claimant’s rebate amount under the homestead property tax rebates for homeowners and tenants program (C.54:4-8.57 et seq.). Each claimant would thus receive a direct payment of 80 percent of the claimant’s allowed rebate amount. The bill thus converts a portion of the direct property tax relief afforded to claimants under the program to indirect property tax relief disbursed to the claimants’ municipalities, thereby lowering residents’ property tax bills.
Estimated Fiscal Year 2006 homestead rebate expenditures are $1.09 billion; under this bill municipalities would thus have received $218 million. In Fiscal Year 2005, when budget language did not modify rebate amounts, the State expended $1.54 billion on the program, which would have yielded $308 million for municipalities under this bill.
Subject to caps, a resident’s statutory rebate amount is a function of the amount by which the resident’s property taxes (or rental equivalent) exceed five percent of the resident’s annual income, the resident’s annual gross income, whether the resident is a homeowner or a tenant, and whether the taxpayer is 65 years of age or older or disabled or both. The largest possible individual rebate is $1,200.