SENATE BUDGET AND APPROPRIATIONS COMMITTEE

 

STATEMENT TO

 

SENATE, No. 2096

 

STATE OF NEW JERSEY

 

DATED:  JUNE 21, 2012

 

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 2096.

      This bill makes a supplemental appropriation of $789,000,000 to a revised FY 2013 Homestead Benefit Program for both homeowners and tenants and clarifies the FY 2013 appropriation act line item of $398,500,000 for the FY 2013 Homestead Benefit Program as available as was proposed for the homeowners' portion of the overall program.  The additional sum of $789,000,000 provides for significantly enhanced property tax relief payments to the State’s beleaguered homeowners and tenants who creak under the incessantly growing weight of the highest residential property taxes in the Nation.  The legislation is contingent upon the enactment of a “Millionaire’s Tax” in accordance with Assembly Bill No. 3201 or Senate Bill No. 1147 of 2012.

      The bill affects the four beneficiary classes as follows:

      Homeowners who are blind, disabled or 65 years of age or older will receive homestead benefits according to statutory provisions under this bill.  The benefit will equal 20 percent of the first $10,000 in property taxes paid in 2011 if an applicant’s income does not exceed $100,000;  15 percent if an applicant’s income is more than $100,000 but not more than $150,000; and 10 percent if an applicant’s income is more than $150,000 but not more than $250,000.  Under the FY 2013 appropriations act, only senior, blind, and disabled homeowners with incomes up to $150,000 receive restricted benefits:  10 percent of the first $10,000 in property taxes paid in 2006 if an applicant’s income does not exceed $100,000; and 5 percent if an applicant’s income exceeds $100,000 but is not more than $150,000.

      Other homeowners will receive the same homestead benefits under this bill to which they are entitled under the FY 2013 appropriations act but for two changes.  First, eligibility is extended to non-senior, non-blind, non-disabled homeowners with incomes of more than $75,000 but not more than $100,000.  Second, the benefit calculation is based on property taxes paid in 2011 instead of 2006.  Consequently, these homeowners will receive a benefit equal to 10 percent of the first $10,000 in property taxes paid in 2011 if their income does not exceed $50,000;  and 6.67 percent if their income is more than $50,000 but not more than $100,000.

      Tenants who are blind, disabled or 65 years of age or older will receive homestead benefits according to statutory provisions under this bill.  Notably, FY 2013 homestead benefits for such tenants with incomes not exceeding $70,000 will be between $150 and $850.  Such tenants with incomes exceeding $70,000 but not exceeding $100,000 will receive a $150 payment.  The FY 2013 appropriations act eliminates homestead benefits for all tenants.

      Other tenants will receive half their statutory homestead benefit payment, or $75, under this bill.  The FY 2013 appropriations act eliminates homestead benefits for all tenants.

 

FISCAL IMPACT:

      This bill makes a Fiscal Year 2013 supplemental appropriation of $789,000,000 from the Property Tax Relief Fund and clarifies the FY 2013 appropriation act line item of $398,500,000 for the FY 2013 Homestead Benefit Program as available as was proposed for the homeowners' portion of the overall program.  The bill is contingent upon the enactment of a “Millionaire’s Tax” in accordance with Assembly Bill No. 3201 or Senate Bill No. 1147 of 2012.  The Office of Legislative Services (OLS) estimates that an increase of the top marginal tax rate from the current 8.97% to 10.75% on income above $1.0 million as proposed in those bills may raise between $754 million and $836 million in Fiscal Year 2013, assuming an effective starting date of January 1, 2012.