Murphy, legislative leaders reach deal on historic property tax relief

Gov. Phil Murphy was joined by Senate President Nick Scutari, D-22nd District; Assembly Speaker Craig Coughlin, D-19th District; and several other leaders in South Brunswick June 15 to announce a deal expanding the governor’s proposed ANCHOR Property Tax Program to now provide $2 billion in property tax relief to 2 million New Jerseyans.

The negotiations between Murphy, Scutari and Coughlin have been ongoing the past few weeks as the leaders determined how to allocate a multibillion-dollar windfall of surplus money, which NJBIZ has reported on over the last few months.

Murphy’s original ANCHOR budget proposal, which replaces the long-standing Homestead Rebate Program, called for distributing $900 million in property tax relief to nearly 1.8 million homeowners and renters across the state. But, because of the increasing windfall, Murphy signaled that he wanted to do something historic, saying he hoped to back the truck up on property tax relief.

Wednesday’s announcement certainly marks one of the largest property tax relief initiatives in the state’s history.

“I am proud to stand alongside Speaker Coughlin to announce the delivery of $2 billion in direct property tax relief, which will provide over 2 million rebates to New Jersey households. This is a truly historic tax relief program for our state,” said Murphy. “Today we take a step forward on this administration’s promise to make New Jersey a stronger, fairer, more affordable sate for our middle-class and working families.”

“It is extremely important to ensure that these programs are sustainable and any additional tax cuts and investments continue beyond this fiscal year and I know I have that commitment from the leaders to do that,” said Scutari. “While we’re announcing a $2 billion dollar program today, I continue to look forward to additional targeted programs helping middle-class taxpayers.”

“New Jerseyans need tax relief now,” said Coughlin. “It is my priority to enact the largest tax relief program in our state’s history and I am pleased that our $2 billion ANCHOR program puts us on course to deliver the boldest and most robust affordability agenda for our working and middle-class families for years to come. With $1,500 and $1,000 in direct property tax rebates for homeowners and $450 for renters, more than 2 million New Jerseyans will see money back in their pockets – relief they will be able to count on into the future and relief that builds on the existing 14 tax cuts enacted since 2018.”

Under the expanded program, there will be a full phase-in of rebates and a simplification of benefits.

• 870,000-plus homeowners with a household income of under $150,000 would receive a $1,500 property tax credit on their property tax bill each year
• 290,000-plus homeowners with a household income between $150,000 and $250,000 would receive a $1,000 property tax credit on their property tax bill each year
• 900,000-plus renters with incomes up to $150,000 would receive $450 each year to help offset the rent increases caused by increasing property taxes

The administration says that the rebates could offset over 16% of the average property tax bill for some homeowners. In 2021, the average New Jersey property tax bill was roughly $9,300.

“We all know that property taxes put pressure on our middle-class and working families on a good day. But the pressure they are facing now during a time of hyper global inflation is even greater, and it makes our mission that much more urgent,” said Murphy. “But while we deliver this much-needed property tax relief, we are not going to ignore the need for our budget to invest in the critical items that make our state so special.”

Murphy says that the leaders are not interested in one-offs or tax break gimmicks, and believe that ANCHOR is a sustainable, multiyear initiative.

“Their focus and mine is squarely on making ANCHOR a lasting program that will deliver real relief to middle-class and working families, not just this year, but next year and the years beyond,” said Murphy.

And I’m extremely proud that we’re going to be able to live up to this promise at a time when our residents need us to keep our word more than ever before.
— Gov. Phil Murphy

Despite this major announcement, the budget process and negotiations still continue through the end of the month before the start of the new fiscal year on July 1.

“We have a once-in-a-lifetime opportunity to utilize financial resources to deliver tax relief and make strategic investments in our future. Our budget decisions at this time can have a transformational impact for New Jersey. It is important that we make use of this unique opportunity with tax savings and investments that are effective and sustainable,” Scutari; Senate Majority Leader Teresa Ruiz, D-29th District; and Senate Budget Chairman Paul Sarlo, D-36th District, said in a statement.

Senate Republicans have already blasted the proposal, saying it does not go as far as their proposed “Give It Back” rebates.

“The ANCHOR rebates that Gov. Murphy and Democrats announced today are underwhelming to say the least,” said Sen. Michael Testa, R-1st District, a member of the Senate Budget & Appropriations Committee. “The ‘Give It Back’ rebates proposed by Senate Republicans would provide double the relief and help twice as many people. This is likely a sign that Democrats are more focused on divvying up billions of pork in the budget than providing New Jersey families with real tax relief this year.”