The New Jersey Tenants Organization (NJTO), the nation's oldest and largest statewide tenants organization, has come out in favor of the NJ SMART Homestead Rebate Bill. The SMART Bill, introduced today by Assemblyman Lou Manzo is a comprehensive approach to property tax reform which rebates half of the school tax to the State's residential taxpayers, and pays for it with a surcharge on New Jersey's progressive income tax.
"The most important thing about the SMART Bill for the one million tenant families of New Jersey" said NJTO President Matt Shapiro "is that it doesn't discriminate against tenants the way the current Homestead Rebate program does. Under the SMART Bill, tenants get full credit for the (approximately) 18% of the rent that goes to pay property taxes, about half of which goes to school taxes. The same formula is used for tenants as for homeowners -- half of the school tax portion of the property tax is rebated -- and that's how it should be."
Last year the NJTO opposed the revised Homestead Rebate program because the formulas for tenants and homeowners were completely different, and that difference did not give tenants full credit for the property tax they pay in their rent. Tenant activists were not happy with the fact that none of the original $800 million dollars in new rebate money last year was earmarked for tenants. In the end, NJTO withdrew its opposition after about $45 million was promised to increase tenant rebates by $50. But the group called for eliminating the discrimination in the program the following year.
"The time has come to stop treating tenants as second class tax payers," said Shapiro, "and that's what the SMART Bill does. Is it perfect? No. Can it be improved? Certainly. But, most importantly, it is the best proposal that has been put forth to deal with the regressive property tax that unfairly burdens low, moderate and middle income working families. It treats tenants fairly, enven though most homeowners will get higher rebates since they pay more property tax on average than tenants. It replaces a nice chunk of this regressive property tax with a progressive income tax surcharge, so that the tax system becomes much more fair to low, modersate, and middle income families. On average, families earning less than $300,000 a year will get a net reduction in taxes. Finally, it does all of this without costing the State a dime, at a time of extraordinary budget deficits. In fact, it frees up the $800 million from last year's program, which can and should be used to prevent the devasting cuts to human services that are vital to the most vulnerable low income population of our State."
"The SMART Bill has all of the elements of a comprehensive approach to solving the regressive property tax problem," continued Shapiro. "The Legislature should pass the SMART Bill, and it should be used as a model for further action by either the Legislature or a Constitutional Convention, should one be established. There is no conflict between the SMART Bill and a Constitutional Convention, which the NJTO does not oppose, and will in fact support if language guaranteeing tenants their fair share of any property tax reduction is inserted in the bill creating the convention. The SMART Bill provides a really good start to addressing this massive problem, using the right kind of comprehensive approach. Most importantly, the SMART Bill is here, it is now, and there is no reason not to pass it."
