Will NJ delay property tax payments due to coronavirus? State finances may get in the way

New Jerseyans struggling to stay financially afloat amid the coronavirus emergency are now facing uncertainty about another deadline just weeks away: Property tax bills come due May 1.

While the state has taken extraordinary efforts to prevent evictions and foreclosures in the wake of the coronavirus's economic destruction, there's been little action when it comes to property taxes, a highest-in-the-nation burden that shows up in the form of four bills every year.

One lawmaker wants to move the due date to July, and introduced a bill to do so on Thursday. Another bill that would extend the payment grace period is waiting for action in the Senate.

But Gov. Phil Murphy has been hesitant when asked about property tax forgiveness or postponing the payment, citing the impact of the pandemic on the state's budget.

Murphy on March 27 said the state was "bleeding money" and he had to be careful about giving too many tax breaks. "I've got to make sure we keep the lights on," the governor said. He said last week that he had no updates on residents' property taxes.

Property taxes support the services of local and county governments, such as police and health departments working to combat coronavirus, but most of the payment goes to school districts. Last year, New Jerseyans paid an average of $8,953 in property taxes, about $186 more than the prior year.

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Several other states have adjusted their property tax collections because of the coronavirus sweeping the nation. Florida extended the payment date by two weeks. In Iowa, the governor suspended fees for late property tax payments the same day she halted evictions. And Murphy's predecessor made changes after Superstorm Sandy hit the state in 2012.

The economic toll of the coronavirus has already hit the Garden State's finances. In March, the state froze nearly $1 billion in planned spending, citing decreased revenues from the shutdown of businesses and the delayed income tax filing deadline. Part of that freeze was nearly $142 million in the Homestead Benefit Program, a tax credit program for certain homeowners who meet income eligibility requirements.

More than half a million residents have claimed a credit through the Homestead Benefit Program, which is worth on average $255, according to data from the New Jersey Department of Community Affairs. The credit shows up on the May 1 tax bill.

"Although I am not in truly dire straits, this Homestead Benefit freeze does create a hardship for me," said Cathy O'Neill, a 68-year-old retiree who lives in Brick. "If New Jersey is going to treat its tax relief programs as optional, it gives me one more reason to think about moving out of the state."

Suspending the Homestead Benefit makes it even more important to help residents amid a time of record-setting unemployment, said Stephanie Hunsinger, AARP New Jersey’s director.

"An extension that coincides with the state and federal income tax deadline of July 15 would reduce confusion and further promote public health, financial relief and peace of mind for all Garden State residents," Hunsinger said, referring to a property tax extension.

Senate President Stephen Sweeney, D-Gloucester, a gatekeeper of what gets done in Trenton and what doesn't, has signaled support for delaying the due date as one of many ways to ease the financial burden on residents. His idea was deferring property tax payments for 45 to 60 days, but he has not taken action in the Legislature to make the change.

Assemblyman Robert Karabinchak, D-Middlesex, filed a bill Thursday to delay the May 1 due date to July 15, when state and federal tax returns are now due, for commercial and residential properties. Moving the due date would allow more financial flexibility for cash-strapped families and small businesses with tight budgets, he said in a statement. 

The Assembly has passed another bill, A-3902, which gives the state more authority to control municipal deadlines, such as for filing budgets, during a state of emergency. The bill, which has not been vetted by the Senate, also allows for extending the grace period for property tax due dates. It is unclear which, if any, of those proposals will move forward.

A slate of bills, the majority of which are meant to provide financial relief from the pandemic, were introduced in the Legislature on Thursday, and the Senate and Assembly are scheduled to vote on the bills Monday. They will conduct their business by phone to accommodate social-distancing restrictions. 

It would be rare but not unprecedented to delay the tax payment date.

After Superstorm Sandy pummeled New Jersey, then-Gov. Chris Christie extended the grace period for fourth-quarter property tax payments by five days and allowed municipal governments to extend the grace period through the end of the year. Bills were due three days after the storm hit the state.

Christie did so via an executive order, which cited the financial hardships facing many victims and in some cases their inability to get to their homes and financial records.

Stacey Barchenger is a reporter in the New Jersey Statehouse. For unlimited access to her work covering New Jersey’s lawmakers and political power structure, please subscribe or activate your digital account today.

Email: sbarchenger@gannettnj.com Phone: 732-427-0114 Twitter: @sbarchenger