Gov. Phil Murphy wants to increase how much the state spends each year on property tax benefits so more New Jersey residents can get them.
According to a proposal released by Murphy on Thursday, homeowners in New Jersey who earn up to $ 250,000 a year will be eligible for state-funded property taxes.
This will add at least $ 100,000 to current income limits for direct property tax benefits. Raising that income threshold will allow the Murphy administration to more than double the number of homeowners who can receive state-funded property tax relief, his office said.
Meanwhile, the size of the average property tax exemption itself will increase according to Murphy’s plan, which he said will be included in the budget he is due to present to lawmakers on Tuesday.
Discounts for tenants too
This offer will also enable many tenants for the first time in ten years to receive the right to receive checks for state-funded discounts.
According to Murphy’s office, by increasing revenue from state-funded property taxes, more than 1 million homeowners will be eligible for average benefits totaling nearly $ 700. The average benefits provided under the existing Homestead program are $ 626 for approximately 470,000 homeowners under lower income limits.
The new program will continue to use the direct credit format to distribute assistance to homeowners, Murphy’s office said.
At the same time, the new benefits, which tenants earning up to $ 100,000 a year will be eligible to receive under Murphy’s proposal, will cost $ 250 for seniors and $ 150 for non-seniors, according to the Murphy administration. These benefits will be provided to eligible tenants through a check or direct deposit, officials said.
During a press conference at Fair Lawn to announce the new initiative, Murphy said increased aid funding should allow more New Jersey residents to stay in their communities, even as they face rising local property taxes.
A new strategy
“We want it to mean lasting relief that keeps families in their homes,” Murphy said.
Murphy’s presentation of a new strategy to combat rising property taxes comes after another increase in the average property tax year on year. The increase, more than $ 170, pushed the average property tax levied in New Jersey last year to $ 9,284, according to the Department of Community Affairs.
Murphy made his offer as state revenue for the first seven months of this fiscal year grew over last year’s figures. Republican lawmakers have launched a “give back” campaign that included calls to increase direct tax breaks.
And while Murphy’s proposal still needs majority confirmation from Democrats to enter the next state budget, lawmakers have again expressed interest in so-called accessibility issues after the November election, in which Republicans won seats in both houses and Murphy nearly upset his contender for the GOP.
Under the current state budget, about $ 340 million has been earmarked to fund Homestead property tax benefits for thousands of seniors and homeowners who earn up to $ 150,000 a year and other homeowners up to $ 75,000 a year .
For most state-funded homeowners, Homestead benefits are provided as a direct credit to their local property tax bills. Loans actually reduce the amount homeowners spend annually on property taxes.
Up to $ 900 million
Murphy said Thursday that up to $ 900 million will be distributed to homeowners and tenants during the fiscal year beginning July 1, when lawmakers take his initiative to ease property taxes.
Murphy’s plan also envisages rebranding Homestead as an “Anchor” assistance program, and “A” means “affordable”.
The new proposal is being put forward by the governor as a first installment in a three-year commitment to increase funding for property tax benefits with the ultimate goal of increasing annual appropriations to $ 1.5 billion. That would allow the average loan for homeowners to exceed $ 1,000, Murphy said.
Such appropriations will also lead to a total funding of direct property tax benefits of up to $ 2.2 billion, which was recorded more than ten years ago during the tenure of the then government. John Basket. It was also the last time homeowners in New Jersey earning up to $ 250,000 a year were eligible for direct state property tax benefits; overall funding for the Homestead program was cut after the Great Recession of 2007-2009.
If lawmakers eventually sign – and Murphy’s office has shown that legislators are receptive – funding increases will continue to reverse the budget trend, which stopped only last year when the Homestead program was upgraded. Over the years, governors and lawmakers on both sides have cut homeowners, using outdated bills as a baseline to calculate their assistance.
Recipients of the estate also faced a “seizure” by the Murphy administration in 2020, when the start of the coronavirus pandemic caused a budget cut of about $ 1 billion, which was used to offset revenue losses in the near future.
In response to Murphy’s announcement on Thursday, Assembly minority leader John DiMayo (R. Warren) pointed to several proposals backed by fellow Republicans that he said would eliminate “the causes of high property taxes.” These include the cessation of payments that some government employees may receive in New Jersey for unused time due to illness, which are ultimately funded by income from property taxes.
“Lips. Murphy uses excessive taxation as an excuse to hide excessive taxation, “DiMayo said.” Municipal spending can be cut by billions of dollars instead of spending billions at the state level. “
During his first four years in office, Murphy increased public funding for K-12 public schools and argued that the increase was in fact a property tax deduction because local school districts were heavily dependent on property taxes to cover their own expenses. .
However, despite the increase in state aid, the total amount of funding raised by public schools through local property taxes has increased compared to the same period last year in 2021, according to data released by the state earlier this year.
Last year, Murphy and lawmakers agreed on the eve of their re-election to fund an income tax rebate of up to $ 500, which was sent to thousands of New Jersey families. But it is unclear whether these tax breaks will be restored within the budget that Murphy is proposing next week.
However, State Treasurer Elizabeth Maher Muoio said the proposal to increase funding for direct property tax benefits would be based on other recent tax benefits that have been passed by the administration, including expanding the childcare tax credit and the income tax credit. . .
“Today we are taking another significant step on our path to making New Jersey stronger, fairer and more accessible,” Muoyo said during Thursday’s event.