TRENTON - Gov. Christie is considering scaling back or eliminating property-tax rebates in his budget proposal, a move that could yield significant savings but would mean going back on a campaign pledge.
As Christie tries to close a projected $11 billion deficit next fiscal year, scenarios under discussion include slashing the popular but expensive rebates, according to two administration officials with knowledge of budget talks.
They stressed that no final decisions had been made. Christie is scheduled to unveil his budget March 16.
At a cost last year of $1.1 billion, rebates form one of the largest pools of money in the budget. Lawmakers in both parties have said privately for weeks they expect cuts to the program.
Rebates are one of the most tangible ways state government tries to offset New Jersey's high local property taxes, which average nearly $7,300. The program is so large and costly, though, that it is a prime target for governors seeking spending cuts.
"You can't bring the budget into balance without looking at it," said an administration source who spoke on the condition of anonymity.
Last year, the program was scheduled to send 510,000 homeowners younger than 65 checks averaging $900 or $670, depending on income. For 500,000 senior-citizen homeowners, the rebates were larger, averaging $760 or $1,300.
The rebates have proven to be political flash points in recent years with resistance to cuts from lawmakers of both parties.
But some critics, mostly outside government, have derided the program as a gimmick that uses sales and income-tax revenue to send out politically popular checks under the heading of property tax relief.
Former Gov. Richard J. Codey proposed suspending the program for everyone but senior citizens in 2005 and settled for a scaled-back version. Former Gov. Jon S. Corzine reduced rebates in three of his four budgets.
Last year he, too, proposed ending the rebates for everyone except senior citizens, until a tax amnesty program provided a last-minute boost.
When Corzine first proposed the deepest of his cuts, candidate Christie called the reduction "a declaration of war on the middle class."
On the campaign trail, Christie promised to restore rebates: "The last thing Chris will do is to follow Corzine's lead in eliminating property tax rebates for 1.2 million New Jerseyans," his campaign Web site read. In the final days of the race, though, he conceded that full restoration might not be possible this year.
Christie has few easy choices for cuts, given the state's dire finances. He has targeted other major line items, saying he does not expect to pay the state's $3 billion pension obligation and warning mayors and school boards to expect reductions in state aid. But even those savings will leave a multibillion-dollar gap.
Pollster Patrick Murray said Christie might be politically safe if he can maintain rebates at last year's level.
"He can say, 'I can't raise them this year, but at least I preserved them,' " said Murray, director of the Monmouth University Polling Institute. "If he cuts them, there could be some problems."
High property taxes, Murray said, are the number-one issue in the state.
Previous governors who have cut the program have carved out exceptions. Senior citizens and the disabled, for example, have usually been spared. Under Corzine, tax filers with incomes of $50,000 or less saw no cuts last year.
One lawmaker last year called for trimming the benefits for wealthy senior citizens as well, to provide more money for other programs or for lower-income homeowners, though those plans did not advance.