LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 3084
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: AUGUST 27, 2024
SUMMARY
Synopsis: Allows property tax rebate for disabled veterans.
Type of Impact: Annual State cost increase.
Agencies Affected: Department of the Treasury.
Office of Legislative Services Estimate
Fiscal Impact FY 2026 FY 2027 FY 2028
State Cost Increase $234 million $244 million $254 million
 The Office of Legislative Services (OLS) estimates that the State cost for the disabled veterans’
property tax rebate will total approximately $234 million in FY 2026, $244 million in FY 2027,
and $254 million in FY 2028.
 Using data compiled by the United States Department of Veterans Affairs and the New Jersey
Department of the Treasury, the OLS estimates that about 68,800 veterans will be eligible to
receive the property tax rebate in FY 2026.
 The cost of the disabled veterans’ property tax rebate is anticipated to grow in future years
because the number of veterans who receive disability compensation, the average residential
property tax bill, and the amount of rent constituting property taxes are all expected to increase
over time.
BILL DESCRIPTION
This bill establishes a property tax rebate program for veterans with service-connected
disabilities. Under the program, eligible veterans would receive a rebate equal to a percentage of
their property taxes paid, with the percentage matching their service-connected disability rating as
determined by the United States Department of Veterans Affairs. Eligibility is limited to veterans
with gross incomes not exceeding $200,000 for the tax year, and the maximum rebate allowed is
$5,000 per year. For veterans living in rental properties, 18% of the rent paid is considered
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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equivalent to property taxes for calculating the rebate. This rebate would be in addition to any
other property tax relief programs, but the total of all rebates and credits cannot exceed the amount
of property taxes paid.
The bill aims to provide property tax relief to veterans with partial disabilities, as those with
100% total and permanent disabilities are already exempt from property taxes under existing law.
The bill requires eligible veterans to apply annually for the rebate and includes provisions for
handling property tax delinquencies and appeals of rebate determinations.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that the bill will result in additional State costs of approximately $234
million in FY 2026, $244 million in FY 2027, and $254 million in FY 2028. The cost of the
disabled veterans’ property tax rebate is anticipated to grow in future years because the number of
veterans who receive disability compensation, the average residential property tax bill, and the
amount of rent constituting property taxes are all expected to increase over time. The increases
will be limited, in part, because the bill caps the amount of the property tax rebate at $5,000 per
taxpayer.
According to OLS calculations, there are approximately 4.8 million veterans nationwide who
have a disability rating of 10 percent to 90 percent. Projections based on the data indicate that in
calendar year 2025 veterans living in New Jersey will constitute about 1.44 percent of that total,
or 72,466 veterans. Data from the Department of the Treasury indicate that about five percent of
New Jersey taxpayers who claimed the gross income tax exemption for veterans reported gross
income of $200,000 or more. Therefore, the estimated number of New Jersey veterans who may
be eligible for a property tax rebate was reduced from 72,466 to 68,843, or 1.37 percent of the
national total. The estimated number of United States veterans in each disability rating category
was then multiplied by the estimated proportion of veterans living in New Jersey (1.37 percent).
These calculations yielded the number of veterans who may be eligible for a property tax rebate
of 10 percent, 20 percent, and so on beginning in FY 2026.
The OLS then used the data from the United States Department of Veterans Affairs and the
Department of the Treasury, along with property tax data from the Department of Community
Affairs, and data from the U.S. Census Bureau’s American Community Survey to estimate the
total annual State cost increase.
Data from the Census Bureau indicate that the homeownership rate in the State is about 60
percent with renters comprising 40 percent of the population. According to data from the
Department of Community Affairs, the average residential property tax bill increased by 2.22
percent per year, on average, from calendar year 2019 through calendar year 2023. Based on the
current median rent in the State, the OLS calculated that rent constituting property taxes is
currently $5,400 per year. By applying the rate of increase in the average property tax bill to the
most recent average residential property tax bill for 2023 ($9,569) and annual rent constituting
property taxes for 2024 ($5,400) the OLS was able to estimate the revenue loss in future fiscal
years. Where necessary, projected rebate amounts were reduced so that they did not exceed the
individual rebate limit of $5,000 per taxpayer.
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Section: Revenue, Finance, and Appropriations
Analyst: Patrick Walsh
Assistant 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.).