ASSEMBLY BUDGET COMMITTEE

STATEMENT TO

ASSEMBLY, No. 3202

STATE OF NEW JERSEY

DATED: JUNE 21, 2012

      The Assembly Budget Committee reports favorably Assembly Bill No. 3202.

      This bill makes a supplemental appropriation of $789,000,000 from the Property Tax Relief Fund to the Department of the Treasury for a revised Fiscal Year 2013 Homestead Benefit Program for both homeowners and tenants, and clarifies the Fiscal Year 2013 appropriation act line item of $398,500,000 for the Fiscal Year 2013 Homestead Benefit Program as available as was proposed for the homeowners' portion of the overall program.

      Under the bill, the enhanced property tax relief payments to the State’s beleaguered homeowners and tenants will affect 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 Fiscal Year 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 Fiscal Year 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, Fiscal Year 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 Fiscal Year 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 Fiscal Year 2013 appropriations act eliminates homestead benefits for all tenants.

      The bill takes effect on July 1, 2012, but remains inoperative until the date of enactment of a bill increasing the gross income tax rate on taxable income exceeding $1,000,000 (pending before the Legislature as Assembly Bill No. 3201 or Senate Bill No. 1147 of 2012) and the Fiscal Year 2013 annual appropriations act (pending before the Legislature as Assembly Bill No. 3200 or Senate Bill No. 2013 of 2012).

FISCAL IMPACT:

      The bill appropriates $789,000,000 from the Property Tax Relief Fund to the Department of the Treasury for a revised Fiscal Year 2013 Homestead Benefit Program.