LEGISLATIVE FISCAL ESTIMATE

SENATE CONCURRENT RESOLUTION No. 96

STATE OF NEW JERSEY

222nd LEGISLATURE

 

DATED: SEPTEMBER 30, 2026

 

 

SUMMARY

 

Synopsis:

Proposes constitutional amendment to increase amount of veterans’ property tax deduction from $250 to $2,500 over four years.

Type of Impact:

Increased annual State costs to the Property Tax Relief Fund.

Annual local government net revenue gain.

Agencies Affected:

Department of the Treasury; municipalities.

 

 

 

Office of Legislative Services Estimate

Fiscal Impact

FY 2029

FY 2030

FY 2031

FY 2032

State Cost Increase

$72.8 MM

$114.2 MM

$150.3 MM

$181.8 MM

Local Net Revenue Gain

$1.4 MM

$2.2 MM

$2.9 MM

$3.6 MM

 

·       The Office of Legislative Services (OLS) estimates that the legislation will result in additional State costs of $72.8 million in FY 2029 with annual costs increasing to $181.8 million in FY 2032 due to the four-year phase-in of the increase in the veterans’ property tax deduction.  Under current law, the State reimburses municipalities for the revenue loss caused by the property tax deduction and pays two percent of the deduction amount to municipalities as a reimbursement for related administrative expenses. 

·       Municipalities will realize annual net revenue gains equal to two percent of the increase in the amount of the veterans’ property tax deduction, reflecting higher State reimbursements for administrative costs. 

·       The total number of veterans’ property tax deductions has declined by about 6.0 percent annually, and this estimate assumes that this downward trend will continue.  

 

BILL DESCRIPTION

 

      The concurrent resolution would increase the existing annual $250 property tax deduction for veteran homeowners who were honorably discharged from active service in any branch of the Armed Forces of the United States and their surviving spouses to the following amounts: $1,000 in tax year 2025, $1,500 in tax year 2026, $2,000 in tax year 2027, and $2,500 in each tax year starting in tax year 2028.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates that the legislation will result in additional State costs of $72.8 million in FY 2029 with annual costs increasing to $181.8 million in FY 2032 due to the four-year phase-in of the increase in the veterans’ property tax deduction.  As introduced, the legislation requires the amount of the veterans’ property tax deduction to increase beginning in tax year 2025.  This estimate assumes that the legislation will be updated to require the veterans’ property tax deduction to increase beginning in tax year 2028 and that the increased State reimbursements to municipalities would first be provided in FY 2029.

      Municipalities will realize annual net revenue gains equal to two percent of the increase in the amount of the veterans’ property tax deduction, reflecting higher State reimbursements for administrative costs.  These required reimbursements will result in local government net revenue gains estimated at $1.4 million in FY 2029 (consisting of $72.8 million from State reimbursements less $71.4 million in property tax revenue losses) and increasing to a peak of $3.6 million in FY 2032 ($181.8 million from reimbursements less $178.2 million in property tax losses).  Thereafter, the total cost of the veterans’ property tax deduction is expected to decrease following the full phase-in of the increased property tax deduction coupled with the expected continued decline in the number of eligible recipients. 

      The total number of veterans and surviving spouses receiving a property tax deduction has steadily declined since FY 1979, the earliest year for which information is readily available.  In that year, some 462,220 veterans received a property deduction; in FY 2026, some 114,894 did so.  More recently, the total number of veterans’ property tax deductions has declined by about 6.0 percent annually, and this estimate assumes that this downward trend will continue. 

      The chart below illustrates the actual and projected trends in the cost of the veterans’ property tax deduction and the number of deduction recipients from FY 2020 through FY 2040.

Section:

Revenue, Finance, & Appropriations

Analyst:

Scott A. Brodsky

Staff Fiscal & Budget 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.).