RIDGEWOOD, N.J. (CBSNewYork) — A Bergen County village has a new property tax savings program that aims to encourage residents to shop locally in exchange for a break on their tax bill.
Property taxes in Ridgewood, New Jersey are among the highest in the state.
“It is very painful,” Jenny Stillman said.
Now, the village is offering prepaid debit cards. Instead of points or miles, you get tax relief. It’s called the estate card. It’s run by Municipal Cards Incorporated.
“Our modeling shows that the average person, if they are using this card as their everyday spending, they’ll save 20 percent of their property tax through the program,” Municipal Cards CEO, Eli Weingarden said.
Every dinner out or gift purchased with the Ridgewood Estate Card could help reduce a tax burden ever so slightly.
“Seems like it would be a no-brainer if it can also reduce our taxes,” Jenny Stillman said.
Cardholders add money every month to their accounts to receive a base .2 percent off their property taxes on purchases at participating national retailers like Walmart, and local merchants like Trattoria La Bocca.
Businesses are usually charged a fee for swiping a credit card, but with the estate card the fee is rebated back to the customer towards their third quarter property taxes.
Councilman Ramon Hache said this will also help local businesses compete with online retailers by offering extra bonus discounts.
“So if you are coming into town and making a $100 purchase, merchants apply 10 percent discounts. You still pay $100, but merchant credits 10 percent or $10 to an account at village hall that got towards paying property tax liability,” he said.
Businesses hope it will keep shoppers in town.
“I think people shop online more, not just malls, and I think now there is an incentive for them to stay local,” Heather Rozzi said.
For the village it comes with an added advantage — revenue comes in on a monthly basis instead of quarterly.
For consumers there is no monthly cost, spending requirement, or limit on the cards. The more you shop, the more tax dollars you save.
Municipal cards are also available in Bridgewater and East Brunswick.
The company said it takes a few pennies from each transaction.