Move to waive N.J. property-tax penalties for federal workers if shutdown resumes

“We hope that does not happen, but we should be prepared,” he said.

Estimated 5,000 N.J. residents affected by the shutdown

While the rate of growth has been slowing, New Jersey’s annual property-tax bills remain among the most expensive in the nation at an average $8,767. The average bill is also consuming an increasingly large share of the typical homeowners’ yearly salary; it now accounts for roughly 11 percent of the state’s median household income of $76,475, according to the latest U.S. Census data.

Property taxes are typically paid on a quarterly basis in New Jersey, with installments due on February 1, May 1, August 1 and November 1. Homeowners who fall behind on their quarterly payments are charged interest. The rate is typically 8 percent on the first $1,500, but it can climb above 18 percent for the most delinquent cases.

As the federal government shutdown dragged on, state lawmakers began to grow concerned that thousands of New Jersey residents who were not being paid by federal employers could be in danger of missing the February 1 property-tax payment. In all, some 20,000 New Jersey residents work for federal agencies, and an estimated 5,000 were directly impacted by the partial shutdown.

The bill allowing for the grace period was introduced on January 17 and rushed through legislative committees before being passed by the full Assembly and Senate on Friday.

If Gov. Phil Murphy signs it into law, the bill would let towns waive the interest penalties for federal workers. Language in the bill calls for the grace period to be retroactive to December 2018 but also to apply to any future government shutdowns, including those that would involve all federal agencies instead of the limited group that was impacted by the most recent funding interruption. (It would not offer the same grace period to state workers impacted by a state government shutdown.)

Offering a grace period

Towns could offer the grace period to federal workers impacted by a shutdown, as well as employees of companies that have a contract with a government agency, such as the Federal Aviation Administration. That’s an important provision since Congress ended up allowing federal workers to receive back pay they were owed after the 35-day shutdown ended, while federal contractors were not provided such relief.

As of last week, Trump’s dispute with U.S. House Speaker Nancy Pelosi and other Democrats had not been resolved, fueling concerns that a new shutdown could be looming. In fact, Trump, a Republican, told The New York Times in a recent interview that he views ongoing talks with congressional leaders “a waste of time” as he continues to press for a full $5.7 billion in U.S. taxpayer funding for the construction of a wall, which he repeatedly said during the 2016 campaign would be financed by Mexico.

Cryan, the sponsor of the New Jersey bill, had harsh criticism for the president as he continues to leave open the possibility of another shutdown.

“Donald Trump’s behavior is impulsive and unpredictable, and he obviously has no consideration for the hardship of federal workers,” Cryan said.