Reform no big relief for some seniors

By HEATHER HADDON -- HERALD NEWS -- Nov. 25

Selena Brown cleaned offices and hotels until she was 82 years old. She would have kept working if she hadn't collapsed in her basement two years ago after a stroke.

Brown says she dearly misses that income when trying to pay her Paterson home's $6,000 annual property tax bill.

"I've been struggling to keep a roof over my head," said Brown, 84, who has been living in the house since 1967. "Social Security doesn't cover the taxes."

Brown was hoping for some help when state lawmakers recently issued 98 cost-cutting proposals to drive down property taxes. But a plan to offer a 20 percent direct tax credit probably won't help low-income seniors who already receive property tax relief.

Bob Gross, 70, of Wayne, followed the three months of deliberation by four bipartisan legislative committees. He's disappointed by the results, officially endorsed by committee members earlier this week.

Recommendations

Reduce property tax bills by 20 percent for homeowners earning up to $50,000 a year. Provide a 10 percent to 15 percent reduction for those earning up to $200,000.

Replace homestead rebate checks with direct tax reductions. Seniors can elect to continue receiving a check.

Make the tax reduction permanent by adding a provision for it to the state constitution.

Establish a commission to study how the state generates revenue.

-- Source: Joint Legislative Committee on Constitutional Reform and Citizens Property Tax Constitutional Convention

"It's like they are throwing us three-quarters of a bone, and then taking half away," said Gross, who pays roughly $7,000 a year in property taxes. "We're being forgotten."

Legislative leaders and the governor are still negotiating details of the proposal, which they hope can be put into action next year. Lawmakers will propose and vote on all of the recommendations next month.

Most homeowners under the age of 65 who earn less than $50,000 would receive a 20 percent property tax reduction. Households earning up to $200,000 would receive reductions between 10 percent and 15 percent.

The program is estimated to cost $2 billion. Lawmakers have identified funds for its startup, but outlying years are still uncertain.

The credit would automatically be applied to tax bills. It would replace the rebate program for everyone but seniors, who can elect to continue receiving a check instead of having their property tax bills reduced. Homeowners under the age of 65 now receive a maximum rebate of $350 while seniors get $1,200.

Some elderly also qualify for a cap on property tax increases. Seniors who receive both a check and a cap won't likely see additional relief. No one would get less than what they currently receive.

"They will do as well as they were, if not a little better," said Assemblyman John Burzichelli, D-Salem, a committee co-chairman.

Lawmakers had hoped to provide more relief for seniors, but were limited by the amount of available funds. "It wasn't sufficient for what we wanted to do," said Assemblyman Louis Manzo, D-Jersey City, a committee member, in a telephone interview.

On average, 5 percent of New Jersey incomes go to property taxes. Many Passaic County seniors, in contrast, devote up to 75 percent of their incomes to such taxes, said Mary Kuzinski, director of the county's senior services.

"They can barely afford it, unless they have a substantial pension," said Kuzinski, noting that few local seniors do.

Brown doesn't have a pension, despite decades of work. "It's hard paying the taxes on a fixed income," she said.

Kuzinski's clients are in similar predicaments: a Totowa senior with a $3,037 property tax bill and $7,910 in income; one from Paterson with $4,670 in taxes making $12,087 annually; a Wayne senior with a $6,601 tax bill and only $7,704 in income.

"They economize," said Kuzinski, explaining how seniors manage. "A lot of them have gone back to work and take part-time jobs."

New Jersey's property taxes disproportionately hurt low- and middle-income families, data presented to the committee shows. State residents earning less than $20,000 devoted almost 30 percent of their incomes to property taxes in 2004. Those earning $100,000 and above spent a maximum of 5 percent.

"It's insane," Manzo said. "The poor and middle class are getting killed."

Manzo is an ardent proponent of increasing income taxes, arguing that they generate less than property and sales taxes. "It's dead last," he said.

The committee hopes to establish a panel of experts to study the state's overall revenue picture.

Increasing income taxes is often seen as a form of political suicide, but Manzo thinks popular support would be behind the move. Of the 270 e-mails sent to the committee, 188 of them concerned establishing fairer taxation mechanisms, he said.

The governor has said he opposes any changes to the income tax. Manzo vows a fight.

"I'm frustrated that he continues to argue that the top one percent shouldn't be treated like the rest of our residents," he said. "They should pay their fair share."

Reach Heather Haddon at 973-569-7121 or haddon@northjersey.com.