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As budget hearings wrap, Senate GOP introduces $4.3B property tax relief bill

‘Give It Back’ plan would appropriate funds to towns and counties

Matthew Fazelpoor//May 23, 2023

New Jersey Statehouse

The New Jersey State House in Trenton. - DEPOSIT PHOTOS

New Jersey Statehouse

The New Jersey State House in Trenton. - DEPOSIT PHOTOS

As budget hearings wrap, Senate GOP introduces $4.3B property tax relief bill

‘Give It Back’ plan would appropriate funds to towns and counties

Matthew Fazelpoor//May 23, 2023

The state budget process transitioned into its next phase during a busy Tuesday in Trenton that included the introduction of a Republican plan aimed at delivering property tax relief.

The Senate Budget and Appropriations Committee held its final budget hearing on Gov. Phil Murphy’s proposed $53.1 billion Fiscal Year 2024 spending plan May 23. The meeting rehashed the final revenue forecasts from the Office of Legislative Services (OLS) and the Treasury Department that were first discussed during the Assembly Budget Committee’s final hearing.

During that lower house hearing last week, lawmakers learned that the all-important April tax collections dropped significantly from the unprecedented surge seen over the last few budget cycles, with Treasury lowering its Fiscal Year 2023 revenue forecast to $52.8 billion – $1.2 billion less than its initial projection – and its Fiscal Year 2024 outlook to $52.8 billion – a $1 billion drop from the February number. That expectation was echoed by OLS, which lowered its forecast nearly $2 billion over the next two-year period versus February projections.

“I know they are the same group that appeared a week ago before the Assembly,” said Senate Budget Chairman Paul Sarlo, D-36th District, at the outset of the hearing. “Some of this may be repetitive and I apologize to everybody, but we are doing our due diligence as a Senate body. At the end of today, the negotiations will begin in earnest. Although, they have already started and been floated out there — some of the negotiations.

Senate Budget Chairman Paul Sarlo, D-36th District
Sarlo

“But today will complete our review of the proposed budget and we’ll proceed accordingly,” he said.

As the hearings conclude, talks between the administration and legislative leaders are intensifying ahead of the June 30 deadline to agree to a spending plan for FY 2024.

‘Give It Back’

Meanwhile, Senate Republicans on Tuesday announced a plan to provide $4.32 billion of “Give It Back” property tax relief to New Jersey’s towns and counties.

The entire Senate Republican caucus signed on as sponsors of Senate Bill 3906, which would appropriate $4.32 billion from the New Jersey Debt Defeasance and Prevention Fund to towns and counties to retire and defease local debt or to fund capital projects on a pay-as-you-go basis.

Under the measure, $3 billion would be allocated to municipalities on an equal per capita basis with each municipality receiving the same dollar amount per resident. That same approach would be used on the county level with the remaining $1.32 billion also allotted on an equal per capita basis.

Lawmakers say the appropriations to towns and counties would average more than $100 million per legislative district and would be the equivalent of approximately $1,250 per New Jersey family.

Sen. Declan O’Scanlon, D-13th District
O’Scanlon

“The Murphy Administration is sitting on billions of dollars of unallocated debt relief funds while towns and counties with substantial needs are being ignored,” said Senate Republican Budget Officer Declan O’Scanlon, D-13th District. “Instead of letting that money waste away and get devalued by inflation, we are proposing to ‘Give It Back’ to towns and counties on a per capita basis to help them pay down debt and meet their important capital needs.

“Our proposal is a fair and transparent way to provide every New Jerseyan, every county, and every town with real property tax relief,” he continued. “There’s no other tax relief plan offered by anyone that comes close to what Republicans are proposing.”

Senate Republicans noted the proposed $4.32 billion includes $1.97 billion in currently unallocated balances in the Debt Defeasance Fund along with another $2.35 billion that would be credited from the General Fund.

They say their plan would have no fiscal impact on the overall budget or expected surplus.

“Our fair and transparent ‘Give It Back’ proposal stands in stark contrast to the back-room dealings of Democrats who have doled out funds to a favored few while most towns and counties with legitimate needs have gotten nothing,” said Sen. Michael Testa, R-1st District, a Senate Budget Committee member. “Every town and county will get a fair share of funding under our proposal, and they will be able to use their portion to reduce their debt or pave roads, build parks, or advance other important capital projects that otherwise would have been funded with debt. Ultimately, this is $4.3 billion of new property tax relief that local governments solely need as their health benefit premiums and pension costs have soared and inflation is at a 40-year high.”

The governor’s budget proposal calls for a $10 billion surplus, a $2.35 billion deposit in the Debt Defeasance and Prevention Fund, and $2 billion for the second round of the ANCHOR Property Tax Relief Program.

Senate Democrats had no comment in response to their counterparts’ proposed legislation.

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