RENTON – A groundbreaking agreement has been reached between Governor Phil Murphy, Assembly Speaker Craig Coughlin, and Senate President Nicholas Scutari to provide significant property tax relief for seniors in New Jersey. This agreement, while ensuring a full pension payment, record funding for K-12 education, and a strong surplus for economic stability, aims to address the affordability challenges faced by New Jersey seniors.
2023 is an important election year where Democrats fear losing more seats to Republicans in light of devastating school cuts that are forcing districts statewide to fire teachers and cut programs. A funding formula supported by Murphy and the Democrats known as S2 has received criticism in recent years as many districts struggle to balance budgets as money is being sent to urban districts, taking from rural districts statewide.
The initiative, called StayNJ, aims to give seniors the option to retire in New Jersey without the burden of excessive property taxes. The agreement includes a comprehensive plan to reduce property taxes for seniors, with a particular focus on those in need. The existing ANCHOR program will provide immediate relief, and the StayNJ property tax relief plan proposed by Speaker Coughlin will be phased in and targeted to benefit seniors who require it the most. The income eligibility for the program will be capped at $500,000, ensuring that costs are contained while delivering historic relief.
“Trenton Democrats are trying to buy votes this year with the promise they’ll deliver StayNJ property tax relief starting in 2026,” said Senator Joe Pennacchio (R-26). “They’re as believable as Wimpy from Popeye who promises, ‘I’ll gladly pay you Tuesday for a hamburger today.’”
The revised plan will extend relief to renters as well, and over the next two years, senior homeowners and tenants will receive an immediate $250 per year increase in aid through the ANCHOR property tax relief program. This boost will result in eligible senior tenants receiving over 35% more relief, amounting to $700 per year, while homeowners will receive $1,250 or $1,750, depending on their income.
“If StayNJ is really affordable and sustainable and something New Jerseyans should expect to provide relief for years to come, why make them wait three years to get a first payment?” Pennacchio asked. “The Democrats’ dark secret is that the flood of federal COVID cash is drying up. They can’t guarantee they’ll be able to fund the program they’re promising today in 2026, even though they’ll campaign on it this fall. It’s completely disingenuous and it defies belief.”
Unlike the Democrats’ vague pledges of future tax relief, Senate Republicans have put forth a concrete proposal to deliver immediate property tax relief amounting to $4.3 billion. This relief would be provided to towns and counties by utilizing existing idle funds that have been allocated for debt relief. The proposal aims to provide tangible and timely relief to taxpayers, addressing their immediate financial burdens.
To maintain fiscal responsibility, language has been agreed upon to guarantee a minimum surplus of 12% of expenditures in subsequent years. The agreement also ensures full contributions to the pension system, K-12 school aid, and the $250 income tax deduction for property taxes paid by veterans, senior citizens, and disabled individuals.
To address administrative challenges, a commission will be established to provide recommendations by May 2024 for the implementation of StayNJ through a unified program and application. This will effectively cut property taxes in half for eligible seniors. The maximum benefit will be indexed to future increases in property tax bills, with a goal of reaching $6,500. The relief will be delivered through a direct credit on property tax bills starting in the first quarter of 2026.
“The Democrats’ StayNJ plan allows the wealthiest seniors to receive the maximum benefit, but seniors most at risk for property tax increases have to settle for less, because it still doesn’t include a school funding solution like the Republican property tax cut proposal,” saod Senator Joe DiMaio (R-Warren) said. “School taxes are the biggest driver of property taxes. Failing to include school funding in the package means StayNJ won’t ever deliver sustainable, long-lasting property tax relief.”
The six-member commission, comprising three members appointed by the Governor and three members appointed by the Legislature, will also work on simplifying and aligning the current ANCHOR and Senior Freeze programs. This will ensure that property tax cuts are efficiently delivered to senior homeowners, while prioritizing renters. The Governor will appoint the Executive Director of the Commission.
The controversial school funding law, passed in 2018 and known as S2, has slashed more than $68.7 million from schools in legislative district 11. Assemblywomen Kim Eulner and Marilyn Piperno say Monmouth Democrat Senator Vin Gopal, who voted for S2, is trying to cover up the damage to schools by introducing gimmicks and Band-Aid legislation.
“Sen. Vin Gopal says he supports property tax relief for seniors, but then introduces a bill exempting schools from state aid cuts if they consistently raise property taxes by the maximum amount. The conflicting measures demonstrate he isn’t serious about making New Jersey more affordable,” Eulner (R-Monmouth) said.
The additional cost for boosting aid through the ANCHOR program this year is estimated to be $140 million. Additionally, $100 million, $200 million, and $300 million will be set aside in a lockbox over the next three fiscal years to cover the total cost of implementing StayNJ for the entire first year, which spans calendar year 2026.