Two million New Jersey taxpayers and homeowners will get tax relief worth up to $1,500 under a deal Gov. Phil Murphy and his fellow House Democrats unveiled on Wednesday .
The $2 billion program comes through state coffers and amounts to reducing the average property tax bill from around $9,300 for many to $7,800, a level not seen in more than a decade. Murphy said.
Murphy, Assembly Speaker Craig Coughlin and Senate Speaker Nicholas Scutari spoke side-by-side in southern Brunswick and said part of their deal includes an agreement to continue the program in the future, meaning it will not offer relief for a single year. It is unclear how long the program will continue.
Record inflation amid news of rising interest rates was a big factor in the decision to tackle property taxes, which Murphy first proposed earlier this year.
“We all know that property taxes put a strain on our middle class and working families on a good day, but the strain they’re facing right now in times of global hyperinflation is even greater,” Murphy said.
The deal has grown to twice the size of the original proposal submitted by Murphy in March.
Under the deal announced Wednesday, 870,000 families earning up to $150,000 would receive “direct assistance” of $1,500; those earning between $150,000 and $250,000 will receive $1,000 in relief and, for the first time ever, according to Murphy, tenants will also receive assistance. Those who earn up to $150,000 will receive $450 in aid.
Murphy’s previous proposal had a $900 million price tag for the state budget, compared to $2 billion for the plan announced Wednesday. It also increases the amount of assistance residents will receive from $700 previously to $1,500 for the multiple property taxpayers covered.
Murphy estimated the deal would affect 2 million homes – more than 5 million of the state’s more than 9 million people.
Republican lawmakers, who regularly advocate for lower property taxes, are not enthusiastic about the plan or the leadership’s commitment to keep it going for years to come. Taxes are usually dealt with in the annual budget each year, which means that if the fortunes of the state change, the property tax program could be eliminated.
“It doesn’t make meaningful changes to fiscal policy and will be the first program to be cut when money gets tight,” Republican House Leader John DiMaio said.
Republicans won seats in the state last year but are still in the minority.
A current property tax relief program has an average benefit of $626, with eligibility limited to homeowners earning $75,000 or less if they are under age 65 and not blind or disabled. People over the age of 65 or who are blind or disabled face an income cap of $150,000.
New Jersey’s average annual property tax rate of $9,300 is consistently among the highest in the country. Taxes are collected by school districts and local governments and pay for educational and other services. They are reliably a political issue in New Jersey, which decided to cap annual property tax increases at 2% in 2010 under former Republican Gov. Chris Christie.
Murphy has leaned more toward affordability since his narrow win over Republican Jack Ciattarelli in November after touting the progressive policies he implemented in his first four years.