Murphy’s new $49B budget focuses on property taxes

Putting property tax relief at the center of  his policy agenda, Gov. Phil Murphy outlined a $48.9 billion spending plan for the next fiscal year during his first in-person address at the statehouse in two years.

The main component of the administration’s effort to lighten the state’s tax burden is the Affordable New Jersey Communities for Homeowners and Renters program, dubbed ANCHOR. In the first year, the program will allocate $900 million for direct property tax relief. Murphy said the relief offered will reduce the effective cost of what homeowners pay in taxes to 2016 levels. At its full funding level in two years, ANCHOR would provide $1.5 billion in direct relief, according to the governor.

“It is true that we here in Trenton do not set property taxes directly,” Murphy said in the text of the speech. “Property taxes are the result of decisions made at the county, local, and school board levels. But one thing we here in Trenton can do is take some of the sting out of those tax bills.”

According to Murphy, more than 1.15 million homeowners with incomes up to $250,000 will get an average of $700 in direct relief. And more than 600,000 renters making up to $100,000 will receive as much as $250.

The ANCHOR program is designed to meet the relief levels set out in the state’s 2007 property tax relief law over the next two years. If that happens, Murphy said, direct property tax relief for homeowners will average more than $1,150 per household.

Murphy’s budget allocates about 24% of its total expenditures to direct aid to education. The governor noted that the administration has spent $3 billion more on K-12 education than the administration of Gov. Chris Christie spend in second term. The new budget would add $650 million in education spending for a total of $9.9 billion.

“Great schools protect a homeowner’s investment,” Murphy said. “They make communities more attractive to prospective new residents. They prepare our workforce for the future. No one wants to see our schools backslide.”

Continuing on the theme of affordability — one that lawmakers on both sides of the aisle have been reciting for months — Murphy also proposed a new $300 million Affordable Housing Production Fund. He said the goal of the fund is to build the entire current backlog of 3,300 approved, but still yet-to-be-built, 100% affordable housing units by the end of his second term.

The Affordable Housing Production Fund will provide real stability for communities,” the governor said. “It will ease the burden on municipalities. And it will short-circuit potential lawsuits by developers. But, most importantly, it will get working families into homes.”

Elsewhere, Murphy said his proposed budget will cuts a variety of state fees by a combined $60 million. Those provisions include one-year fee holidays for driver’s license renewals, marriage licenses, state park entry, and for roughly 130,000 health care professionals.

The governor opened his speech by criticizing Russia’s invasion of Ukraine, noting that state boasts one of the nation’s largest Ukrainian-American populations and is the home of the Ukrainian Orthodox Church of the United States of America. Murphy said the administration is  studying the state government’s exposure to Russian businesses and securities, including in the pension fund.

“And let me make it perfectly clear — we will take whatever actions are needed to ensure New Jersey taxpayer dollars are not supporting Putin’s unlawful invasion of Ukraine,” he declared.