LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 3278
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: JUNE 29, 2023
SUMMARY
Synopsis: Concerns eligibility for senior freeze reimbursement if eligible
claimant exceeds income limit.
Type of Impact: Increased State cost to Property Tax Relief Fund.
Agencies Affected: Department of the Treasury, Division of Taxation.
Office of Legislative Services Estimate
Fiscal Impact FY 2026 and Thereafter
State Cost Increase Maximum of $206,400
 The Office of Legislative Services (OLS) estimates that this bill will not have any fiscal impact
until fiscal year (FY) 2026. The fiscal impact of permitting an eligible homestead property tax
(senior freeze) reimbursement claimant to maintain their base year after a one-time annual
income increase is likely to be no more than $206,400.
 Assuming that this bill is enacted in calendar year 2023, any individuals that regain eligibility
for a senior freeze reimbursement in calendar year 2024 would receive a payment in the latter
half of calendar year 2025 (FY 2026).
BILL DESCRIPTION
This bill provides that, if, for any tax year, a person, who was in the prior tax year an eligible
senior freeze reimbursement claimant, has income that exceeds the income limit for that tax year,
that person would not receive a reimbursement for that tax year. However, that individual would
maintain their base year without change, as long as the person has income in the next immediately
succeeding tax year that does not exceed the income limit for that tax year. If that person’s income
for the next succeeding tax year exceeds the income limit for that tax year as well, the base year
for that claimant would be changed to be the year prior to which the claimant again becomes an
eligible claimant.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that this bill will not have any fiscal impact until FY 2026. Assuming that
this bill is enacted in calendar year 2023, and that an eligible claimant is ineligible in calendar year
2023 due to a one-year increase in income, then that individual would not receive a senior freeze
reimbursement in calendar year 2024 (FY 2025). If that individual regains eligibility in calendar
year 2024, then the individual will receive a reimbursement payment in calendar year 2025 (FY
2026) for property taxes paid in calendar year 2024. Under the bill, this individual’s senior freeze
payment would be the difference between the individual’s residential property tax bill in calendar
year 2024 and the amount paid in their initial base year. Under current law, however, this
individual’s senior freeze reimbursement for property taxes paid in calendar year 2024 would be
the difference between the calendar year 2024 property tax bill and the calendar year 2023 property
tax bill.
The annual fiscal impact of permitting an eligible senior freeze reimbursement claimant to
maintain their base year following a one-time annual income increase is likely to be no more than
$206,400. The OLS uses data provided by the Department of the Treasury indicating that an
average of approximately 1,200 homeowners in each year from calendar year 2017 through
calendar year 2021 lost their eligibility for the homestead property tax reimbursement after
becoming ineligible due to an increase in income. To craft a maximum estimate of increased costs,
the OLS first assumes that 1,200 homeowners would annually regain eligibility after having lost
eligibility in the previous year due to income.
The OLS then utilizes residential property tax bill data from the Division of Local Government
Services in the Department of Community Affairs to estimate the average increase in a claimant’s
senior freeze reimbursement from year-to-year. The data indicate that the Statewide average
residential property tax bill in calendar year 2022 was $9,490. The data also indicate that the
average residential property tax bill has increased 1.78 percent per year since calendar year 2017.
Based on these data, the OLS estimates that the average residential property tax bill will be $9,659
in calendar year 2023 and $9,831 in calendar year 2024. The amount of the estimated increase
from calendar year 2023 to calendar year 2024 ($172), when multiplied by the estimated number
of claimants who may be affected by the bill, results in additional State costs of $206,400.
The OLS notes that it is likely that annual costs will fall below the maximum estimate of
$206,400. This is because the data provided by the Department of Treasury indicates that only as
much as one-third of individuals, who were denied based on income in previous years, were
approved in the following years.
Section: Revenue, Finance and Appropriations
Analyst: Christopher Myles
Senior Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).


Statutes affected:
Introduced: 54:4-8.74