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A Project of The Annenberg Public Policy Center

Christie’s Tax Tale

Chris Christie shaded the truth when he took credit for closing New Jersey’s budget gap “without raising taxes.” It’s true he didn’t raise state taxes, but the governor’s first budget extensively revised and reduced a program that once provided residents with local property tax rebate checks. As a result, nearly 1 million homeowners received an average $269 property tax credit in fiscal year 2011, down from an average rebate check of $1,035 the year before.

The New Jersey governor spoke Sept. 27 at the Reagan Library. His theme was “leadership and compromise,” and he cited his experience as a Republican working with a Democratic legislature.

Christie, Sept. 27: Leadership and compromise is the only way you can balance two budgets with over $13 billion in deficits without raising taxes while protecting core services.

Christie — who after the speech once again rebuffed calls to run for president — did face significant budget problems when he took office in January 2010. He inherited a $2.2 billion shortfall in the fiscal year 2010 budget and declared a fiscal emergency to deal with it. In his first budget for fiscal year 2011, Christie faced a structural deficit of $10.7 billion.

To help close the budget gap, Christie overhauled the Homestead Rebate program. Christie cut the program from $1 billion to $268 million and renamed it the Homestead Benefit program. Instead of mailing out rebate checks, the program now provides quarterly tax credits against a homeowner’s property tax bills. Christie also deemed all tenants and homeowners who earn more than $75,000 ineligible for the program, and he sharply reduced the benefit for others. In its budget analysis, the nonpartisan Office of Legislative Services said the average benefit declined from $1,035 in fiscal year 2010 to $269 in fiscal year 2011.

So, did Christie close the budget gap without increasing taxes? Homeowners who relied on those checks to help pay property taxes might disagree with him.

In fact, the governor refers to the program as “direct tax relief” in his latest budget.

Christie’s fiscal year 2012 budget — which he signed June 30 — increases the Homestead Benefit program from $268 million to $458 million. On page 20 of his budget summary, Christie touts the increase in a list of budget accomplishments: “Doubles the Homestead Benefit to provide direct property tax relief to New Jersey families.” The Office of Legislative Services says the average benefit will increase to $476 — which isn’t quite double last year’s average and is less than half what it was before Christie took office.

— Eugene Kiely