New Jersey Democratic leaders said they plan to spend $2 billion from the state’s $4.6 billion budget surplus for property tax relief to homeowners and renters this year.
Republicans said they will seek a full Senate vote on a separate tax rebate program that will provide direct relief to more New Jerseyans.
Gov. Phil Murphy on Thursday announced details about the Affordable New Jersey Communities For Homeowners and Renters, or ANCHOR program, intended to provide relief to two million New Jersey households (5.5 million residents).
According to Democrats, the program, which Murphy first announced during his budget address in March, will be phased in immediately. Democrats said they hope the program will be in effect for years to come.
Flanked by Senate President Nick Scutari (D-Union) and Assembly Speaker Craig Coughlin (D-Middlesex), Murphy stated that under the plan, homeowners making less than $150,000 will receive a tax credit of $1,500, while those making $150,000 to $250,000 will receive a tax credit of $1,000.
Under this plan, the government will also send renters who make less than $150,000 a direct check for $450.
“In 2021, the average New Jersey property tax bill was about $9,300,” Murphy said. “For middle-class families, getting that $1,500 in direct relief, that average bill will effectively become $7,800.”
However, not everyone is impressed by Murphy’s proposal.
Senate Republicans called the plan “underwhelming,” and announced they plan to seek a full Senate vote Thursday on a separate tax rebate they said would provide $3 billion to $4 billion in “immediate relief” to four million residents.
Under the GOP plan, called “Give It Back,” taxpayers whose gross income for 2021 was less than $500,000 would receive a refundable tax credit. Individuals and married couples who filed their taxes separately would receive $500 and married couples who filed jointly would receive $1,000.
“The ‘Give It Back’ rebates proposed by Senate Republicans would provide double the relief and help twice as many people,” Sen. Mike Testa (R-Cape May). “This is likely a sign that Democrats are more focused on divvying up billions of pork in the budget than providing New Jersey families with real tax relief this year.”
The Senate blocked a similar motion by freshman Sen. Ed Durr (D-Gloucester) for a full Senate vote in May. It has yet to receive a committee hearing.
Peter Chen, a policy analyst with the New Jersey Policy Perspective, lauded the Democrats’ proposal, noting that he thinks it’s admirable that renters are included in the program. Though, he said $450 may not be enough to offset the rising cost of living for some of the state’s most vulnerable residents.
“There are still a number of other proposals, which could help alleviate costs for working and middle-class families,” Chen said. “There’s a proposal to expand the earned income tax credit and expand eligibility. There’s a proposal for a state-level child tax credit. And these would also put money back directly into the pockets of families who need it, and the families who are struggling most at a time of high inflation and economic turmoil.”
Affordability has been a buzzword for Democrats and Republicans, alike. At the beginning of the current legislative session, which began in January, leaders from both parties said tackling affordability was their number one priority this year, though both parties disagree on how to make that a reality.
New Jersey’s fiscal year 2023 budget takes effect July 1. With both houses of the state legislature heavily leaning Democratic, it’s expected that many of Murphy’s proposals will make it into the final budget.