Janet Hoven has been the mayor of Chester Borough since 2015.
She’s been a Realtor in town since 2011.
So, few people have had a better view of the negative impact of the now-$10,000 cap on the deduction of state and local taxes (commonly known as SALT) on everyone’s federal tax returns.
“It’s very difficult when people are doing their taxes and it comes to that line where you may be used to putting down $50,000, and you’re putting $10,000,” she said.
“And it’s very difficult to sell a house that has $40,000 in taxes when a buyer is only going to get to deduct $10,000.”
But, when it comes to creating a workaround to solve this problem — U.S. Rep. Josh Gottheimer (D-N.J.) is planning a bill under which local taxes can be counted as charitable contributions — Hoven has a response you may not expect.
She’s against it.
“I philosophically don’t agree with it,” she said.
“My thoughts are, it’s disrespectful to charities. A charity you choose to support. You don’t choose to pay your property taxes, you have to pay your property taxes and you’re doing a disservice to all those people out there who work for charities to put property taxes in the same category as a charity.”
She knows the approximately 1,650 residents of Chester Borough could use the help.
The 1.5-square-mile town has 464 houses. The average assessed value of a home in 2019 was just under $500,000. Including school taxes, an average assessed home would pay around $13,000 in taxes. On the highest end, the bill would be between $25,000 and $30,000.
That’s why, if Chester Borough ever were able to salvage the SALT deduction with a charitable workaround, Hoven ultimately would support it.
“It’s hurting the town,” she said. “My personal opinion? I philosophically don’t agree with it.
“Does that mean that it’s not in the best interest of our residents? And when I put on my mayor’s hat, that I have to look at it differently? Of course, it does.
“If it’s in the best interest of the constituents or the voters and the residents of Chester Borough to put in a form where they can claim their property taxes as a charity, then my recommendation, as the mayor, would be: If this is going to help our residents, then, yes, we should do this.
“Philosophically, do I think it’s right? No.”
As Chester Borough is set up, Hoven, a Republican, does not cast a vote. That’s up to the town council.
The issue surrounding SALT deductions, however, goes much higher than Chester.
Hoven wishes the state would step in and solve the problem a better way.
“I think you look at the root of the problem,” she said. “You don’t solve a problem by bringing in something that has nothing to do with it. Solve the problem at hand. Lower taxes. Find a way to fund schools. Do something so that your property tax bill is not as high as it is.”
And she knows her view won’t necessarily be applauded by other elected officials. She’s not concerned by that.
“I think some people won’t appreciate it,” she said. “It’s the same view I took on the ‘rain tax.’ No tax is good. But, if you have a commercial development in your town and your property taxes are going to pay to have your stormwater management done because of their runoff, then you should be able to charge them more because that’s costing your taxpayers more.
“Some things you can’t look at as just purely one side or the other, you have to look at what’s in the best interests.”