In a new campaign plan put forth Wednesday, Lt. Gov. Kim Guadagno is calling for further caps on property taxes in New Jersey by limiting bills to no more than 5 percent of a homeowner’s annual household income.
Referring to the proposed cap as a property tax “circuit breaker,” Guadagno, who is currently seeking the Republican nomination in this year’s upcoming gubernatorial race, says that the new threshold would go into effect if a homeowner’s school district-related property tax liability exceeds 5 percent of his or her total income. Direct credits would then be issued on tax bills for any amounts above the cap.
“We need to make New Jersey more affordable for everyday, hardworking New Jerseyans, and we need to do it now,” Guadagno said in a statement. “Instead of study commissions and hollow campaign promises, my plan will deliver immediate property tax relief targeted to the middle class families who need it most while we pursue long-term, structural reforms to lower property taxes for all homeowners.”
The campaign claims that average savings under the plan would come out to approximately $1,000 annually and be capped at $3,000.
Guadagno said that while New Jersey’s imposed 2 percent cap on property tax has helped, more needs to be done, citing data from the Tax Foundation showing that property taxes increased by $700 million last year in the state, which contributed to an average tax bill on a single-family home of $8,549. The national average, according to the Tax Foundation, is $3,296.
“After decades of attempts by Trenton politicians that have fallen short of real relief, some people believe actually lowering property taxes is impossible,” Guadagno said. “I disagree. We can and must take action before more of our friends, neighbors and loved ones flee New Jersey for lower taxes in Pennsylvania, Texas and North Carolina.”
Guadagno said that the plan would also call for increased state aid to school districts to help cover the cost of the credits and would not negatively impact current school funding levels.
While the campaign estimates the plan would cost the state roughly $1.5 billion, Guadagno said a combination of savings from a statewide government audit, excess aid from overfunded school districts and new state revenue growth would go toward paying for it.
Under the plan, the overall tax burden would be eased on middle class families rather than on millionaires, Guadagno added.
“By ensuring that homeowners aren’t forced to pay school taxes in excess of 5 percent of their household income,” Guadagno said. “New Jersey families won’t have to leave the state due to untenable property taxes. Families, seniors and the middle class will finally have certainty they’ll be able to afford to live in New Jersey.”