The upcoming state budget is slated to include hundreds of millions of dollars in property tax cuts and direct checks, according to a June 21 statement issued by Gov. Phil Murphy and the state Legislature’s top two lawmakers.
Details are not yet clear on the total price tag for the Fiscal Year 2022 spending plan, which was nearly $45 billion under what Murphy proposed in February.
A year ago, state officials feared an economic meltdown as tax revenue cratered amid mass business closures to stop the spread of COVID-19. Since then, the state has been buoyed by billions of dollars in added cash, thanks to $4 billion of new debt, budget cuts going into the pandemic, and post-COVID pent up consumer demand.
Now, state officials are expecting a $10 billion surplus, on top of $6.2 billion in federal relief from the White House under the American Rescue Plan.
Murphy’s office did not return requests for comment on a spending breakdown or the total budget, nor did the offices of Senate President Stephen Sweeney, D-3rd District, or Assembly Speaker Craig Coughlin, D-19th District.
Lawmakers were initially planning to introduce and vote on such a proposal during a June 17 committee hearing, but that was delayed last week. Republicans and open government activists have both decried what they contend is an opaque budget process, especially given the never-before flush fiscal picture for the state.
Under an agreement struck last fall, the budget will include $500 tax rebates to more than 760,000 New Jersey families. That will carry a price tag of roughly $319 million, according to Murphy’s office.
Homestead benefits – or aid that the state gives for property tax bills – will be expanded for the first time in a decade. Currently, the formula used to calculate how much aid a homeowner gets is based on 2006 property tax records. The budget agreement calls for expanding the formula to base it on the 2017 property tax records. Murphy’s office estimated that seniors and disabled homeowners would see their average relief go up by $130, and lower-income homeowners by $145. The price tag for this would be $80 million.
The state would expand eligibility for the earned income tax credit, lowering the minimum age from 21 to 18, which state officials estimate would benefit another 20,000 residents. And the tax break would be eligible for anyone over 65, which could benefit another 70,000 residents. All told, this would have a $13 million price tag.
The tax credits for those with families and dependents would be increased, as would relief for the state’s veterans.
“These benefits will be spent in the local economy, generating jobs and business activity in communities across the state,” Sweeney said in the statement from Murphy’s office.