Kim Guadagno, candidate for Governor, today announced her plan to deliver immediate property tax relief for middle class families and outlined long-term reforms to lower property taxes for all New Jerseyans, including fixing the school funding formula and ending sick pay abuse.
At its core, Guadagno’s plan would impose a property tax ‘circuit breaker’ by capping a homeowner’s property tax bill to a percentage of their household income.
“We need to make New Jersey more affordable for everyday, hardworking New Jerseyans, and we need to do it now,” said Lieutenant Governor Kim Guadagno. “Instead of study commissions and hollow campaign promises, my plan will deliver immediate property tax relief targeted to the middle class families who need it most while we pursue long-term, structural reforms to lower property taxes for all homeowners.”
According to the Tax Foundation, New Jersey has the highest property tax burden in the country. Last year despite a 2% cap, property taxes increased by $700 million and the average property tax bill on a single family home in New Jersey increased to $8,549 compared to $3,296 nationally. More needs to be done to actually reduce the burden of high property taxes, which are particularly harmful to the middle class, seniors on fixed incomes and young families who are deterred from buying a home.
Guadagno added, “After decades of attempts by Trenton politicians that have fallen short of real relief, some people believe actually lowering property taxes is impossible. I disagree. We can and must take action before more of our friends, neighbors and loved ones flee New Jersey for lower taxes in Pennsylvania, Texas and North Carolina.”
Like a circuit breaker for electricity, which automatically stops the flow of electricity after exceeding a safe capacity, the property tax ‘circuit breaker’ kicks in if the school portion of a homeowner’s property tax liability exceeds 5% of their yearly household income. The homeowner will receive a direct credit on their tax bill for any amount exceeding the 5% threshold. Depending on the school district, average savings under this plan would be $1,000 annually.
The school district will receive increased state educational aid to cover the cost of the credits, so no schools will lose any funding under the Guadagno plan. The way the program is designed, middle class families – not millionaires – will be the greatest beneficiaries, but all property tax payers win because of the certainty they will have from the cap.
“By ensuring that homeowners aren’t forced to pay school taxes in excess of 5% of their household income,” explained Guadagno, “New Jersey families won’t have to leave the state due to untenable property taxes. Families, seniors and the middle class will finally have certainty they’ll be able to afford to live in New Jersey.”
This program will be open to all New Jersey households, but will apply to primary residences only and the benefit to the taxpayer will be capped at $3,000. Savings would depend on a homeowner’s household income and school district. The senior freeze and Homestead programs will remain in place, but homeowners will choose the program that is best for them.
Click here to download a fact sheet on the Guadagno plan.
With a circuit breaker threshold set at 5% of household income, this plan will cost the state approximately $1.5 billion. Guadagno proposes paying for this plan by using savings from a statewide government audit, excess adjustment aid from overfunded school districts and additional revenue growth to the state.
To view the full plan, click here.
So if someone’s annual salary is $100k and they have 10 kids living in a home with a $5k they get no benefit. How is that helping middle class?
Wow, my school taxes are over $6,000 which would mean that if I earn 60k or less you would get an immediate reduction of $3000.00, that would be a big help.
The problem with property taxes in NJ , at least partially, is that taxes that used to go to the municipalities, have been taken over by the state. The primary tax that the State took from municipalities, was the energy tax. In return, the state was supposed to provide aid to the townships.
It was a foolish plan to begin with, as it placed another level of bureaucracy between the payee and the township that was supposed to benefit. Now with the state freezing funding, despite growth in different municipalities, it has turned into the State straight out stealing from the municipalities.
In other States, the town collects the sales tax, or a portion of it. In NJ, the Township has no source of funds other then property tax, everything else goes to the state, which has done a wonderful job of blowing these funds.
Hey Wondering, Lakewood is a UEZ district we keep all the sales tax money!
This plan needs some tweaking. For example, if someone were to purchase a home with higher taxes then the 5% cap. they should be responsible for it.
While all property taxes are high, if someone is purchasing a home, the taxes should be taken into consideration when budgeting for that purpose.
This is very different from someone who owns a home that the increase in taxes in putting a strain on them.
If this passes on new home purchases, this would give an unfair advantage to someone who makes less then someone else, and in reality would just subsidize builders allowing them to charge more for their homes.
Maybe the state should stop passing feel good, look good and do nothing but drain money from towns, schools ect.
To justwondering, based on the real way mortgages work, they won’t be able to buy such a house…
Voter, You think everyone buying a $650k house is making $240k per year?
She also calls for a modification to the PILOT tax abatement program, which is a good thing. The PILOT program allows tax deferred properties to pay Township taxes while being exempt from school district taxes. thereby starving the school district of much needed funds and placing a disproportionate burden on other properties.
so if taxes are lowered… where will the funds come from to compensate for the lost revenue ?
higher gas taxes? what else can they tax?