Tenants comment on Corzine's Budget

Rental Assistance and the Right to a Tenant Tax Rebate

Apples and Oranges are not the Same
In these hard economic times, tenants can feel secure in knowing that New Jersey’s tenant rental assistance, called the State Rental Assistance Program (SRAP) has had $15 million added to its budget, bringing the amount up to the $50,000 which was originally the target amount for this emergency assistance. This will help about 2,000 families who are desperate for assistance on their rent.

In an interview with Matt Shapiro of New Jersey Tenants Organization (NJTO) he explained, “We have always strongly supported this program.”  But Shapiro also explained that Corzine’s budget is also “taking away $127 million, a much larger amount, from the Homestead Rebate Program for those tenants earning less than $50,000 a year.”

Shapiro said the difference is like apples and oranges.  Sure, they are both fruit, but they are different types of fruit.  The Rental Assistance and Tenant Tax Rebate are both about money, but the Rental Assistance is for those tenants who are facing economic crisis.  The tenant tax rebate program has to do with recognizing that tenants pay tax through their rent. Being a taxpayer means a lot in this country and tenants pay their fair share—if not more.  Homeowners can deduct their real estate taxes against federal income taxes, but tenants are not allowed to do this, despite the fact that 18% of a tenant's rent, on average, goes to pay property taxes.  When the NJ Homestead Rebate Program was created in 1990, it was an historic recognition of tenants as property taxpayers.  Furthermore, the formula used then was the same for homeowners and tenants. Since then, each successive administration has changed the formula, so that tenants have gotten a smaller and smaller share of the rebate money.  This year's budget proposal is the most discriminatory change yet.  We can’t let Corzine’s budget take away our right to a tenant tax rebate!

Shapiro point out that the tenant tax rebate gives tenants some relief from paying taxes on “bloated rents that have made NJ nearly the most expensive state in the nation for renters.”  Keep in mind that tenants were also hit with the increase in sales tax.  This gave homeowners rebates by pushing more of the tax burden on to tenants and low income people.  There are hundreds of thousands of renters below the $50,000 mark.  How can they be expected to pay more tax every time they shop for necessities?  And how can anyone think it's right to balance the State Budget on the backs of these lower income tenants.  This is perhaps the most regressive change to the State's tax system imaginable.

This year, as in previous years, the tenant tax rebate application form came as part of the New Jersey Gross Income Tax form.  However, many low income renters do not file an income tax return because their income is too low.  Many of these families are still entitled to a homestead rebate because they are paying "market" or "rent-control"  rents without subsidies and live in buildings that pay full property taxes. These tenants should have applied for the rebate even if they don't have to file a return.  Just use the same form, NJ-1040, and fill out the part that is the Homestead Rebate application, without filling out the income tax part.

The battle of high taxes is as much a tenant issue as it is for homeowners.  Tenants should join NJTO and keep an eye on this issue to avoid having more of the tax burden pushed our way.

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