N.J. GOP Districts See More Payouts

NJ SAVER property tax rebates going primarily to Republican areas, Treasury statistics show

GANNETT STATE BUREAU TRENTON-- NJ SAVER property tax rebates, which may be pared back or suspended by Gov. James E. McGreevey in an effort to balance the state budget, are paid in greater totals to residents of Republican legislative districts than Democratic districts.

Town-by-town rebate statistics from the state Department of the Treasury illustrate a little-known political backdrop for a program that last year paid $707 million to homeowners in 46 percent of New Jersey households to offset school taxes.

The state data, combined with data from the U.S. Census Bureau, show:
• Republican districts received $107 million more in NJ SAVER rebates in 2001 than Democratic districts did, even though there are two more Democratic districts.
• Not all of the disparity can be traced to the fact that only homeowners, not renters, can get the rebate. Even among eligible homeowners, participation in Democratic districts is as much as 20 to 30 percentage points lower.
•Thirty-three of the 36 lawmakers who represent the 12 districts that enjoy the most benefits from NJ SAVER are Republicans. Conversely, 37 of 39 lawmakers in the 13 districts that benefit least are Democrats.

Despite that, plus a deficit McGreevey pegged at nearly $6 billion, the new Democratic governor will not seek to delay the next rebate payment until July 2003, as his aides repeatedly have warned is a possibility, according to a published report.

The McGreevey administration will not confirm that report, which said NJ SAVER rebates will stay at their 2001 level, without the scheduled increase of about $100. The wealthiest homeowners, however, would be eliminated from the program.

Republicans contend that McGreevey actually would be cutting the rebates if he blocks the scheduled increase, keeping them at 80 percent of their final target. Sen. Anthony Bucco, R- Boonton, whose district got 43,948 rebates last year, called it a broken campaign pledge.

"There should be no mistaking the fact that this plan will take a significant amount of property tax relief money away from homeowners. Current law dictates that property owners will receive more relief, but the governor is now saying he will take it away," Bucco said.

Any changes in NJ SAVER would be difficult to pitch, said Jon Shure, a public policy analyst who was communications director for Gov. James Florio. Shure dislikes the rebates - calling them "putting a Band-Aid on cancer" --but says tax debate gets oversimplified.

"On a certain level, it makes it easier for him if the places where his party is most powerful are least affected. That helps on the margin," Shure said.

"But for the public at large, people might not pay that much attention to how they're affected. The buzz would be just about how the governor eliminated property tax rebates."

Democrats have suspected that their constituents don't benefit from NJ SAVER rebates at rates equal to residents in GOP suburbs and farm country. They were surprised, though, that fewer eligible homeowners in their towns register for rebates and had no explanation for that.

"The fact that some of our richest areas in the state enjoy the largest benefits suggests that we should rethink the way we raise and rebate money at the state level." said Sen. John Adier, D-Camden, who supports a constitutional convention to reform property taxes.

Homeowners in Adier's district, which, covers suburban Camden County, received 46,741 rebates last year - more than any other Democratic district. Nevertheless, Adier said the entire system should be reformed.

"I don't think our district does well on the property tax overall, and I would support changing the rebate program if it offers us the prospect of a better tax system for the whole state," Adier said.

NJ SAVER rebates were first paid in 1999, when they averaged $120. The program originally was going to be phased in over five years, but the Legislature last year accelerated implementation.

More than 1.4 million rebates were paid last year, averaging $499. The program's $707 million cost was nearly $100 million over budget. This year's average rebate is scheduled to be $600, which would bring the program's cost to more than $850 million.

Nearly 35 percent of the 3 million households in New Jersey don't qualify for NJ SAVER rebates because they are rented, not owned. Renters are eligible for homestead rebates, which are limited to a maximum of $100 a year unless a person is 65 or older or disabled.

Of the roughly 2 million owner-occupied homes, nearly 30 percent, or 595,000, didn't receive NJ SAVER rebates in 2001. Some didn't apply. Many disabled or elderly householders instead were paid the higher homestead rebates, which are as high as $750.

Rebates vary by municipality They are based on the school taxes paid (using the 1997 school tax rate) on the first $45,000 of equalized assessed value of an owned home. Actual rebates are sometimes lowered because homestead rebates are deducted from the payment.

Forty percent of legislative districts are represented by an all-Republican delegation, and those districts received 50 percent of NJ SAVER spending in 2001. Forty-five percent of districts elected three Democrats in 2001, and their residents got 35 percent of the rebate money.

That gap translated to $107 million in 2001 - $354 million spent on rebates in the 16 Republican districts, and $247 million spent on rebates in the 18 Democratic districts. The six districts with mixed delegations received proportional amounts in rebates.

Part of the explanation for the gap lies in the state's pattern for distributing aid to local school districts. The rebate is based on the school tax paid, and suburban and rural districts have higher tax bills because they receive less state aid than city schools.

Participation is lower in towns with the smallest rebates -- including Jersey Shore resorts in Cape May, Monmouth and Ocean counties that generally vote GOP. Rebates are highest in Roosevelt in Monmouth County $885, and participation is in the top 10.

But there are plenty of exceptions. New Brunswick -- poor enough to receive extra school aid under the Abbott court rulings- has the 15th highest average rebate, $677, but only 50 percent of homeowners receive NJ SAVER rebates. That's 18th lowest in the state.

Nearly 78 percent of homeowners in Deal got NJ SAVER rebates in 2001, even though the township's average rebate of $67 was eighth lowest in the state. No cities were even close, despite rebates that averaged $463 in Newark, $501 in Jersey City and $400 in Elizabeth.

Participation is highest in the 12th District, which is represented by Republican Senate President John Bennett, R-Monmouth, and two GOP Assembly members. But the district's average $523 rebate is only 17th highest in the state.

Nearly 80 percent of homeowners got NJ SAVER rebates last year in the 16th District, anchored by the Republican bastion of Somerset County, even though just seven of the 40 districts in the state had lower rebates than the $449 average there.

Near the opposite end of the spectrum is the 31st District, where only 53 percent of homeowners received rebates - even though the average rebate in the district, which includes Bayonne and part of Jersey City, was fourth highest in the state at $560.

Sen. Leonard Lance, R-Hunterdon, whose 23rd District is among the three top beneficiaries under NJ SAVER, said increased publicity for the program might be a solution. Lance didn't know why homeowners in Democratic areas didn't get as many rebates.

'The SAVER program provides property tax relief to homeowners throughout the state," Lance said. "I have supported it in the past, and I support it today."

Homeowners receive NJ SAVER rebates at the highest participation rate in Hunterdon, Somerset, Sussex and Morris counties - all solidly GOP counties, where greater than 75 percent of homeowners get the rebate.

Some of the highest participation rates would be cut, however, if McGreevey and the Legisiature enact the governor's campaign pledge to end rebates for homeowners earning more than $200,000. Hunterdon, Morris and Somerset are among the nation's wealthiest counties.

Participation rates by homeowners are lowest in urban counties like Essex and Hudson. They're also below 65 percent in the three counties that span the southernmost tip of New Jersey-- Cape May Cumberland and Salem counties.

Here's the latest salvo in the class warfare game. Just as, on the federal level, democrats complained that they were not getting their fair share of income tax rebates, here in The People's Republic of New Jersey, they are complaining that they are not getting their fair share of the property tax rebates. Perhaps that is because Republicans pay the lion's share of the property taxes here. It would stand to reason that the lion's share of rebates would come back to them. But, what did reason ever have to do with democrats?

Of course he could pull a Florio and suspend property tax rebates for property tax payers, and give it to renters, welfare and disability recipients. I can't believe Florio did that and only lost to Whittman by 25,000 votes. True testament to the stupidity of most NJ voters.

Yeah, sort of. It accounts for virtually all of the differentials in rebate amounts to the republicans (i.e., high tax payers) and the democrats (low tax-payers.) By using the expression "sort of" the author tries to imply that this factor is a relatively minor one, and that there is something way more insidious going on.

This is one of those articles that fall in the category of "DUH!"
Republicans are more productive and prosperous, more likly to buy homes and to may taxes on them. Democrats are less likely to do these things. They are more likely to be consumers of other people's tax money, than generators of their own.
Therefore, if "tax rebates" were NOT going more to Republican areas than Democratic, it would be clear evidence that someone was cooking the books. Duh!
However, it is flatly false to imply that renters, as opposed to homeowners, get no benefit from a property tax rebate. In a competitive economy, apartment owners are compelled to set their prices at the minimum that will cover their costs and a moderate profit, to keep their units occupied. Since taxes are one of the costs they must cover, lower taxes mean smaller rises in rents for tenants. (Since all other costs are continuing to rise, rents will not go down as a result of the rebates.) Duh!

Congressman Billybob

New column up: "The Truman Factor."

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