StayNJ property tax cuts survive in apparent NJ budget deal

After weeks of negotiations, New Jersey legislative leaders have agreed to terms on a budget deal that would include the property tax cut for seniors — the StayNJ initiative — proposed by Assembly Speaker Craig Coughlin last month.

Murphy administration officials confirmed Monday that they and leaders of the Legislature have agreed to a tentative deal on the “global framework” of a state budget plan. The final version, officials said, would include some of the tax relief Coughlin had sought in his proposal — and addresses some concerns Murphy had with that plan.

Those concerns — including Murphy's desire for caps and qualifications on who could receive the new property tax rebates — were addressed in a compromise, officials said. The deal would allow for New Jersey to meet its obligations for a full pension payment, fully fund school aid payments and maintain the large surplus the governor built into the budget plan he proposed in February.

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Earlier: Could NJ seniors get a 50 percent cut on property taxes? A proposal gets one step further

What will it cost?

Administration officials said they now expect the program to cost about $1.3 billion and stressed that in its final form, the initiative will include a “significant focus on equity.”

This new version of the program would include renters as well.

The agreement would set aside around $140 million for fiscal years 2024 and 2025. In addition, the state would set aside about $100 million, $200 million and $300 million for each of the next three years respectively.

This deal would also allow both senior homeowners and renters to get a $250 credit this year and next year, which is an increase to $700 from the $450 renters were previously eligible to receive through the ANCHOR program.

What else changed?

One of the biggest changes to Coughlin’s proposal is that StayNJ will now be implemented as a single program — rather than a combination of three.

A commission will make recommendations by next May on how to make that possible, because the logistics of the plan in its previous form also were a concern for the governor’s office.

This would “come in the form of a tax credit or credit on the tax bills, with seniors guaranteed 50% off,” officials said, with the goal of having that show up on tax bills in the first quarter of 2026.

Coughlin’s initial plan had no income limit, but the new plan would put a cap on incomes at about $500,000, with a projected 90% of eligible recipients earning less than $200,000, officials said.

Another change would be lowering the overall payout from $10,000 to $6,500.

“The goal or the intention is to have just one program when this is fully phased in in three years,” officials said, with the plan to adhere to Coughlin’s initial proposal and make sure seniors have the opportunity to get half off their property tax bill.

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Political pressures appear to ease

While the apparent compromise may project notions of a streamlined process, negotiating the StayNJ proposal's survival hasn’t happened without tension. When Coughlin and his leadership counterpart, Sen. Nick Scutari, first proposed the StayNJ program last month as a property tax credit program, it was met with resistance from the executive branch.

Murphy said at the time that there are a few things about the bill that are concerning, with the “biggest one” the expense being added to the budget, where “we’ve got revenues that are softening already,” and another being that it “would be for everybody,” so even millionaires like Murphy would get a break.

Murphy’s office was said to be preparing for all possibilities, including a government shutdown, though the governor himself noted that he has a great relationship with Coughlin and the Legislature overall and that both sides are “focused on seniors and making the state more affordable."

The StayNJ bill was amended to include the expansion of the Senior Freeze program, which Murphy included in his proposed budget for fiscal year 2024. The expansion of eligibility would include seniors earning up to $150,000, a $50,000 increase, and would decrease the residency requirement from 10 years to three years. It remains in the new agreement.

Katie Sobko covers the New Jersey Statehouse.

Email: sobko@northjersey.com

This article originally appeared on NorthJersey.com: StayNJ property tax rebate is key to deal on NJ state budget