Property Tax Battles Looming

Posted on 12/1/2013 by | AARP Blog Author | Comments

Mary Keashen, of Cherry Hill, saw her homestead tax benefit cut roughly in half.  Photo by Michael Rubenstein.

Mary Keashen, of Cherry Hill, saw her homestead tax benefit cut roughly in half. Photo by Michael Rubenstein.

By Jen A. Miller

Mary Keashen, 95, of Cherry Hill, lives on a fixed income in a two-story Cape Cod that she and her husband bought in 1957.

When the Homestead Benefit Program was cut by the state legislature for the 2011 fiscal year, her budget was hit. Benefits under the program for the average taxpayer were cut by more than half. So instead of a $1,000 reduction on her $6,400 property tax bill, Keashen got a $510 break.

“I have a lot of bills, and everything’s gone up,” she said.

Strain on fixed incomes
The change was especially rough on people with fixed incomes, said Dave Mollen, 71, of Union, AARP New Jersey president.

Property owners 65 and older can claim the tax credit on a home that was their primary residence as of Oct. 1 if their income is $150,000 or less before exemptions and deductions (not including Social Security, railroad retirement benefits or unemployment benefits). For people under 65, the maximum allowable income is $75,000.

The reduction in the homestead tax break dropped state spending on the program from more than $1 billion in fiscal year 2010 to $268 million the following year. AARP New Jersey is asking Gov. Chris Christie (R) to restore funding to the 2010 level when he issues his 2015 budget proposal in mid-January.

In addition, AARP New Jersey is urging Christie to ask the legislature to reverse a change it made in the income eligibility for the Senior Freeze, officially known as the Property Tax Reimbursement Program.

Previously, residents 65 and older or receiving Social Security disability benefits who have lived in the state for 10 consecutive years and earn less than $80,000 a year were eligible for a rebate to make up the difference between how much property taxes went up from one year to the next.

Starting with the 2012 tax year, property owners are eligible only if they make less than $70,000 a year.
“Every public opinion poll and AARP member survey shows that in New Jersey, unaffordable property taxes are the number one issue of concern,” Mollen said.

“A huge number of people live on Social Security alone. In New Jersey, that’s barely enough to pay your extremely high property taxes and utility bills.”

New Jersey homeowners pay the highest property taxes in the nation, according to the U.S. Census Bureau. The average residential property tax bill comes to $7,885, according to the New Jersey Department of Community Affairs.

AARP New Jersey is also pushing for the permanent expansion of Medicaid.

The 2014 state budget provides for the expansion of Medicaid under the Affordable Care Act, but Christie vetoed a bill that would have made the expansion permanent. It will expire in 2015 unless it is included in the 2015 budget.

In 2014, Medicaid is expected to provide health insurance for an additional 234,000 individuals under 65, according to the Rutgers Center for State Health Policy.

“Expanding Medicaid permanently will provide continued coverage to people who could not otherwise afford it,” Mollen said.

Visit facebook.com/AARPNJ for updates on the tax issues and Medicaid expansion.
Jen A. Miller is a writer living in Collingswood, N.J.