A2481

An Act temporarily rolling back and freezing the amounts of property tax bills.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares:

a. The State of New Jersey, as well as the United States as a whole, are experiencing a severe economic recession that has caused the highest State unemployment rates in 33 years, according to January 2010 statistics published by the Department of Labor and Workforce Development.

b. Governor Christie, in his Executive Order No. 14, issued on February 11, 2010, has declared New Jersey to be in a State of Fiscal Emergency.

c. The toll of this recession on New Jersey's local governments has been unusually severe due to the high rate of mortgage and tax foreclosures which has reduced property tax revenues and housing values Statewide.

d. As tax receipts decline due to foreclosures and the inability of property owners to pay their property tax bills, the natural reaction of local units of government is to increase tax rates to make up the difference.

e. The increased tax burden on property taxpayers already suffering from the financial effects of the recession, such as unemployment, reduced hours, and reduced overtime, is more damaging to a community of people in the long run than cuts in government services.

f. It is therefore a compelling public purpose for the Legislature to enact a temporary rollback and freeze on the amounts of property taxes billed and payable in order to give property taxpayers "breathing room" until the unemployment rate significantly declines and reduces the chance of community destabilization.

2. a. Notwithstanding any law, rule, or regulation to the contrary, beginning with the August, 2010 quarterly property tax bills, no property taxpayer shall be billed for quarterly property taxes for any tax year quarter in an amount that is more than one-fourth of the total annual property taxes billed and payable during the 2009 tax year; provided, however, that added and omitted assessments shall be permitted for any portion of an assessment due to a new or formerly unrecognized improvement to the property.

b. (1) Counties and local taxing districts shall be permitted an adjustment to reduce their appropriations in order to compensate for the reduction in property tax revenue anticipated following approval of their annual budgets.

(2) If a county or local taxing district fails to reduce its appropriations to compensate for the reduction in expected property tax revenue required pursuant to this act, then the Director of the Division of Local Government Services in the Department of Community Affairs, the County Executive Superintendent, or the Commissioner of Education, as the case may be, shall adjust the budget appropriations.

c. The Director of the Division of Local Government Services in the Department of Community Affairs and the Commissioner of Education shall promulgate rules, regulations, and procedures to effectuate the purposes of this section.

3. This act shall take effect immediately and shall expire at the end of the tax quarter in which the Department of Labor and Workforce Development first publishes statistics showing that the State unemployment rate is below seven percent.

STATEMENT

This bill would rollback and freeze property taxes at the amounts billed and payable for the 2009 tax year, beginning with the August, 2010 quarterly property tax bills. The amount of a property taxpayer's quarterly tax bill would be no greater than one-fourth of the total annual amount of property taxes billed against the property in the 2009 tax year. Amounts billed and payable for the first two quarters of tax year 2010 would not be affected, since many of those bills have already been sent.

Counties, municipalities, school districts, and fire districts would be required to make adjustments to their budget appropriations, even if the budgets have been finally adopted, in order to account for any reduction in expected property tax revenue. If those local units fail to make the necessary reductions in their appropriations, then County Executive Superintendents, the Commissioner of Education, and the Director of the Division of Local Government Services in the Department of Community Affairs, as appropriate, would be empowered to make the budget appropriations adjustments.

With the State in a fiscal emergency, as declared by Governor Christie on February 11, 2010, due in large part to double digit unemployment rates, it is prudent to rollback and freeze property tax bills at 2009 amounts in order to prevent more erosion of communities that would result from an inability of homeowners and businesses to keep up with unrelenting annual property tax increases.

A property taxpayer who is currently over-assessed and wins a property tax appeal would be entitled to a lower property tax bill, since the rollback and freeze only operate to establish a maximum quarterly amount that can be billed. In addition, counties and local taxing districts would be entitled to assess additional taxes for new improvements to a property.