In Case You Missed It: Applause for Assembly Property Tax Credit Plan

IN CASE YOU MISSED IT...

HOME NEWS APPLAUDS BIPARTISAN ASSEMBLY PLAN
FOR PROPERTY TAX CREDITS
 
Property-tax credits would beat rebates

"New Jersey's property-tax rebates have always come at an enormous expense to the state and its taxpayers, simply because any program that collects money only to dole it out again is costly in and of itself to administer. Even so, no one of any real influence in Trenton has ever seriously suggested that the system might be changed, let alone improved, until now.

"Assembly Speaker Joseph J. Roberts Jr., D-Camden, said this week he plans to introduce legislation that would allow taxpayers to claim their rebates as direct credits on their tax bills each April, enabling New Jersey to save untold dollars in administrative expenses thrown away all these years on the program's operation.

"The idea, though not new -- this page among others has suggested it on a number of occasions -- is especially ripe for serious consideration right now, given the state's precarious financial condition and the absolute need for Trenton to save every penny wherever and whenever it is possible.

"According to Roberts, the state expends about $10 million every year to process those rebate checks, but that number pales in comparison to the $44 million in interest the state pays on the short-term borrowing it must do to send out the checks every fall.

"Although state Treasurer David Rousseau said that a credit could not eliminate all of that cost, and he is undoubtedly right -- state workers would still have to cross-check income-tax returns against the property-tax amounts, for example -- it is nevertheless certain that some savings could be found if the changes as proposed were adopted by lawmakers.

"There is also concern about when those credits would have to be applied -- not in the fall, as has been usual, but in the spring. But even that hurdle might be of a certain benefit to New Jersey.

"Because the state's fiscal year doesn't coincide with calendar year tax payments, it appears that taxpayers would have to wait until April of the following year for their credit to kick in. Those credits would be based on the previous year's property taxes. In other words, 2008 property-tax credits would apply in April 2009. The delay, though annoying and perhaps even a minor hardship for some, would, however, erase some of the political taint surrounding the current rebate program, which both parties have leveraged to curry favor with voters, mailing out rebates weeks before Election Day.

"Rousseau also reminded us this week that turning to property-tax credits raises technical questions with mortgage companies as well as possible privacy concerns.

"Perhaps. But no one is suggesting that any of those difficulties can't somehow be managed, and there is little quibbling, at least on this end, that it wouldn't all be worth it.

"Few citizens of this state connect the early autumn checks to property-tax relief anyhow. Tax credits are the better way to go."

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