Gov. Chris Christie on Wednesday signed an executive order that will allow New Jersey homeowners to prepay property taxes for the first two quarters of 2018, a last ditch effort to minimize in state impact of the GOP tax bill signed into law by President Trump last week before it goes into effect in January.
“The action I took today will ensure that local governments are flexible and accommodating of their local property taxpayers as we transition to the new federal tax code for 2018,” Christie said in a statement. “This executive order requires local officials to dedicate the resources and staffing to serve New Jerseyans who are planning in this way for their families and their futures.”
Christie’s executive order instructs municipalities in New Jersey to allow for pre-payment of 2018 property taxes for the first and second quarters of 2018, something that many towns in New Jersey have already been instructing residents to do. But Christie’s executive order will mandate that all towns allow at least partial prepayment for 2018. If homeowners prepay, they will be able to deduct those payments on their 2017 federal tax returns before new regulations go into effect.
Under the national Republican plan, homeowners will be able to deduct state and local property taxes up to $10,000. But in New Jersey –the highest property tax state in the nation– the plan has been widely unpopular since many property tax bills top the $10,000 maximum deduction. Rep. Tom MacArthur (R-3) is the only member of New Jersey’s congressional delegation to have voted in favor of the tax bill and was a champion of the deduction that made its way into the final bill.
Christie, a lame duck who will leave office mid-January, has also recommended changing New Jersey’s tax deductions to make property taxes on state income tax returns completely deductible. New Jersey’s cap is currently $10,000. Christie estimates that such a deduction would cost the state $150 to $170 million annually, a small part of New Jersey’s $34 billion annual budget. He has called on the state Legislature and the next administration to change the law in New Jersey in reaction to the federal plan.
“We can do something to fix this, and we should,” Christie said last week. “In my view we should make property taxes on our state income tax returns completely deductible in response to what the federal government has done. Because if we don’t it will have an effect on property values in this state.”
While the tax plan could increase taxes for some families in New Jersey, national Republicans have touted the plan’s tax cuts and tax code simplification. Proponents of the plan say that a cut in taxes for corporations will allow for greater investments in polyesters and fuel economic growth.