Bogus Rebates – a Simple NJ Budget Fix

Beth DeFalco (a reporter for the Associated Press) wrote in a 12-Feb-2010 story that an audit conducted by the Treasury Department – Division of Taxation has identified the fact that millions of dollars have been wasted by rebating Property Taxes to senior citizens, disabled citizens, and veterans who did not appropriately qualify for these benefits.

This is unfair to those taxpayers who are paying their fair share of taxes here in New Jersey.

To the average citizen, the simplest solution would be to:

1. Pool together information from State Tax Records, and Registry of Vital Statistics (Birth, death and Marriage records)

2. Create a Database of all New Jersey Taxpayers.

3. Apply an “attribute test” to each taxpayer found within the Database to determine if they were: (a) senior citizens, (b) disabled citizens, or (c) a veteran; as well as residency information and taxable income limitations.

4. Post and indicate a “change” in taxpayers status from the prior year (i.e., increase in income levels above limitation, death of a qualifying spouse, etc.)

5. Grant “secure access” to this Database to all State Agencies and County / Municipal Governments so that they could access this information (in real time) and apply it to their own Property Tax Systems (this is commonly known as Real Time Update). Using a common system will also save money for most local Governments, as they will pay for only the parts of the system they utilize (this is commonly known as Software as a Service or SaaS).

6. Provide an administrative procedure for a speedy appeal and revision of the Database to correct any “mis-coding errors” which has been subsequently identified by: (a) State Government, (b) County / Municipal Governments (or their Agencies), and (c) the effected Taxpayer; together with any notice of corrective action (so applied).

The prompt development and implementation of this Database (or similar mechanism) would provide immediate: (a) budget relief, (b) ongoing resolution to potential future problems, and (c) fairness to all taxpayers.

THE BIG STICK:
Criminal prosecution should be considered against: (a) Taxpayers who “willfully” attempt to defraud the Treasury (with the prospect of restitution of inappropriate prior payments) and (b) County / Municipal Governments who fail in their diligence to obtain appropriate and competent documentation, or to make appropriate inquires with respect to any changes to the underlying taxpayer’s status from which to make their refund claim to the State’s Treasury.

SUMMERY:
We have enough problems, without our neighbors “gaming the system”; however any comprehensive system (as discussed above) needs to be more robust, properly designed and prudently (and fairly) administrated for the great benefit of all New Jersey Taxpayers.