ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY, No. 3

with Assembly committee amendments

STATE OF NEW JERSEY

DATED: JUNE 16, 1997

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 3 (1R) with committee amendments.

      Assembly Bill No. 3 (1R), as amended, provides annually beginning in calendar year 1998, a homestead property tax reimbursement to senior and disabled residents of the State who: (1) are eligible for the program of pharmaceutical assistance to the aged and disabled (PAAD); (2) are current homeowners or mobile home owners; and (3) have paid property taxes on a homestead or rental unit, or mobile home park rental fees on a mobile home, used as their principal residence in this State for at least 10 consecutive years. The annual homestead property tax reimbursement payments would, in effect, "freeze" the property taxes for those eligible senior and disabled residents.

      Currently, a single person must have an annual income of less than $17,550, and a married couple must have an annual income of less than $21,519, to be eligible for assistance under the PAAD program. Eligible senior and disabled residents could receive a State payment equal to the difference between the amount of property taxes paid for the base tax year (1996 or a later year in which the person first becomes eligible for this benefit) and any future tax year in which the eligible homeowner pays taxes that are higher than the base-year amount.

      The homestead property tax reimbursement will be calculated by the Commissioner of Health and Senior Services, who will administer the homestead property tax reimbursement program using information, in the form of property tax payments or other equivalent proof as permitted by the commissioner, provided by applicants for the homestead property tax reimbursement. The homestead property tax reimbursement is required to be paid to those eligible homeowners on or before July 15, 1998 and on or before July 15 in each succeeding year. Payments made pursuant to this bill will be appropriated from receipts in the Casino Revenue Fund. The bill also permits a municipality to apply to the State Treasurer for any costs incurred by the municipality in connection with the administration of this bill, in accordance with procedures to be determined by the State Treasurer.

FISCAL IMPACT:

      Based on property tax data obtained from the Division of Taxation in the Department of the Treasury, PAAD enrollment data from the Department of Health and Senior Services, federal census data on senior citizen mobility and mobile home ownership, and data from the New Jersey Manufactured Housing Association, it has been estimated that, including program administrative costs, the homestead property tax reimbursement program will have a maximum cost of approximately $21 million in FY1999, $39 million in FY2000 and $57 million in FY2001.

COMMITTEE AMENDMENTS:

      The amendments change a program eligibility requirement, reducing the period that a participant must have paid property taxes on a homestead or rental unit, or mobile home park rental fees on a mobile home, used as the participants principal residence from 15 to 10 consecutive years.