Credit and forget it: How some N.J. towns use discount cards to cut residents’ taxes

You’ve heard this one before: New Jerseyans pay the highest property taxes in the country.

But some municipalities are trying to reduce the property tax burden on their residents through a  discount card program, and data shows the idea is picking up steam.

“It’s a win-win for the local residents as well as the local businesses in town,” said Hector Cabezas, a councilman in Glassboro, which rolled out a property tax card program in 2014.

“If we can save a few tax dollars here and there,” said Cabezas. “It adds up.”

How it works

When you make a purchase at a participating business, you present the property tax card to get a discount. But you don’t get the discount on the spot; you pay full price. Instead, the business sends a percentage of the sale to the town, which then subtracts it from your property tax bill.

“If you go to a restaurant and you spend $100 and [the restaurant discounts] 10 percent, $10 will eventually go toward your property taxes,” said Carmine de Falco, founder and CEO of FinCredit, which operates the program in more than a dozen New Jersey municipalities.

“At the point of sale, you will pay the $100, but you know you are getting $10 back as a property tax credit.”

(If you rent your home or work in a participating town, most municipalities will simply cut you a check at the end of the year.)

According to de Falco, the idea is a winner. Since he set up his first property tax card program in Marlboro in 2012, residents there have saved around $200,000 in property taxes from sales approaching $2 million, he said.

In Glassboro, residents have saved $26,500 in property taxes since May, according to local officials.

“What is the most important thing to give back to a homeowner?” said de Falco. “It is not points or miles or even cash back. But property tax credits — everybody can relate to that.”

Everybody can also relate to convenience.

Mayor Michael Mignogna, who set up a property tax card program in Voorhees two years ago, said there is no downside for residents to partake in the program — only the extra step of identifying a participating business.

“If you’re going to buy gas or if you’re going to go buy groceries, which mostly all of us do, it makes sense to go to a participating gas station or supermarket,” he said. “You’re going to get tax credits against your purchase.”

According to Mignogna, 7,000 residents and 50 businesses take part in the 2-year-old program in Voorhees, which has saved homeowners about $100,000 in property taxes.

The upside for businesses

Although local merchants bankroll the property tax discounts and pay fees to FinCredit to participate in the program, they benefit in two key ways: free advertising and a boost in business.

Towns typically publish a list of participating businesses on their websites and use other methods to advertise the program to residents, possibly reaching a much larger audience than merchants could on their own.

“The township does things like put fliers in the tax bill or the sewer bill with all the names of the participants,” said de Falco. “This [program] is another vehicle for [local businesses] to be known by the local people.”

Officials and merchants also said the property tax card program encourages people to shop more frequently at their local businesses instead of buying goods out of town.

“It attracts more customers,” said Filippo Sparacio, owner of Filippo’s Pizzeria and Grill in Glassboro.

“They enjoy it because they come spend money here and then they end up getting money back at the end,” said Sparacio, who estimated that 75 percent of his customers use the property tax card. “It keeps the customers satisfied.”

Frank Panucci, administrator of Point Pleasant Borough, which will roll out a property tax credit program this year, said he expects it to encourage entrepreneurs to set up shop in town.

“It’s going to be an attraction. Businesses are going to be more likely to want to come to Point Pleasant Borough,” he said, “because they’re going to have a borough government that’s actually helping and promoting the economy.”