Net Property Taxes Up 20 Percent Under Christie

Property taxes are eating up a larger share of family income under Gov. Chris Christie than under previous governors, primarily due to a sharp reduction in direct property tax relief over the past two years. In fact, net property taxes are 20 percent higher under Christie than they were when Democrat Jon Corzine left office two years ago.

With property tax credits and rebates included, the average New Jersey homeowner paid $7,519 in net property taxes last year -- compared with $6,244 in 2009 -- according to statistics released by the state Department of Community Affairs on Friday.

That $1,275 increase represents a 20.4 percent hike in net property taxes -- which is the amount of money that the average New Jersey household actually pays in property taxes after property tax rebates or property tax credits are subtracted.

While Christie has been touting his success in holding overall property tax increases to 2.4 percent, the bigger issue is the cut in direct property tax relief. Average property tax rebates topped $1,000 in each of Corzine’s final three years in office, offsetting more than 14 percent of the average property tax bill. In comparison, Christie’s direct property tax credit covered just 3 percent of last year’s tax bill.

Under Christie, the average New Jersey household is spending well over 11 percent of its income on property taxes -- compared with between 8 percent and 9.25 percent under the five previous governors and a national average of less than 3 percent.

The debate over whether New Jersey should cut property taxes or income taxes promises to dominate this spring’s annual state budget battle, beginning with a Senate Budget Committee hearing this afternoon. David Rosen, budget officer for the nonpartisan Office of Legislative Services, Is scheduled to testify about the impact of Christie’s plan to cut state income taxes by 10 percent across the board over the next three years.

Christie declared during his State of the State speech on January 17 that the relatively low 2.4 percent increase in property taxes in 2011 showed that the 2 percent caps on local government spending increases and arbitration awards were working, that property taxes were now under control, and that he could turn his attention to keeping his campaign promise to cut income taxes.

However, Democratic legislative leaders, including Senate President Stephen Sweeney (D-Gloucester) and Assembly Majority Leader Lou Greenwald (D-Camden), said that the Democratic-controlled legislature will put together its own plan to cut property taxes instead of income taxes. Derek Roseman, a Senate Democratic spokesman, said it is uncertain whether Democrats will release any of its alternative proposals before Christie’s annual budget message, which is tentatively scheduled for February 28.

In his budget package, Christie will have to lay out plans for the first year of his planned income tax cut, which will actually span four fiscal years, as well as whether he plans to increase state funding for direct property tax credits.

This year’s property tax credits will appear on third-quarter property tax bills that will be mailed out to homeowners beginning in early February. The 2012 property tax credits, which will reduce property taxes an average of $480, are being paid out of the budget for the current fiscal year, which ends June 30.

“This is the second year that the property tax credits are appearing as a direct reduction on property tax bills, which is a real improvement and a cost savings over the old system of mailing out rebate checks,” noted Andrew Pratt, spokesman for the state Department of the Treasury.

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