As the state budget process reaches the final stretch, Gov. Phil Murphy and Democratic legislative leaders agreed to a framework deal on the recently introduced, senior property-tax cut plan known as StayNJ (A1/S1).

The agreement was first reported by New Jersey Globe and confirmed to NJBIZ by a Murphy administration official. A story in this week’s June 19 issue of NJBIZ lays out the state of play as budget negotiations have taken place in earnest between leaders in Trenton.

StayNJ, a new property tax credit program to address rising costs facing New Jersey seniors, was introduced late in the budget process by Assembly Speaker Craig Coughlin, D-19th District, and backed by Senate President Nick Scutari, D-22nd District.

While Murphy said he was open to doing more for seniors, the governor and his administration were apprehensive about certain aspects of the initial proposal, such as there being no income threshold, a lack of equity and the overall cost of the program—especially as revenue collections trend in the wrong direction. During last week’s “Ask Gov. Murphy” show on News 12 New Jersey, the governor stressed that while affordability – especially for seniors – was a major focus of his administration, any plan would need to be done responsibly and with restraint to avoid Trenton’s sordid history of fiscal irresponsibility.

According to the administration official, StayNJ would be phased in and take effect in January 2026. It will cost roughly $1.3 billion when fully implemented.

The funding plan would include a “lock box” to set aside nearly half of the money needed to fund the program by 2026, with allocations of $100 million in year one, $200 million in year two, and $300 million year three.

Some toplines of the framework agreement include:

• Residents age 65 and older will get a 50% property tax credit with a $6,500 cap (down from the $10,000 initially proposed, which will be indexed based on property tax increases) with an income threshold of $500,000 a year (the original plan had no income threshold).
• Immediate property tax relief under the ANCHOR Program with seniors and renters getting a $250 boost.
• Certain commitments to fulfill pension payments, K-12 funding, and maintain a budget surplus.
• The establishment of a six-member commission to offer recommendations on how to best implement the program.

The Murphy official noted that this agreement would have no impact on the planned, and much discussed, corporate business tax (CBT) surcharge sunset, which is still on track to be phased out at the end of this year.

Leaders are expected to officially announce the StayNJ deal and offer more details as soon as this week, as the budget clock winds down ahead of the June 30 deadline to reach an agreement.