A new property tax relief program announced by Gov. Phil Murphy on March 3 marks one of the latest “affordability” measures state leaders have rolled out since Republican victories swept across New Jersey this past November.

The move, which will provide relief for 1.15 million Garden State homeowners and 600,000 renters, comes as several Senate Republican lawmakers say they plan to introduce a bill that would provide automatic, refundable tax credits of between $500 and $1,000 to anyone that earned less than $500,000 last year.

Both initiatives come in response to New Jersey’s notoriously high taxes and cost of living: the top rates for the state’s corporate business and income taxes are the nation’s highest, while property taxes hit an all-time high in 2021 with an average of $9,284. Democrats in Washington, D.C., meanwhile, have been unable to whip up support to lift the Trump-era $10,000 federal cap on state and local property tax deductions.

Some of New Jersey’s wealthiest towns have property taxes more than double the federal SALT cap.

The measures unveiled Thursday provide an average $700 rebate in the first year of the program for homeowners that earn up to $250,000, and $250 rebates for renters making up to $100,000 a year. Murphy’s office said the program would be spread out over three years and increase by $1.5 billion annually so that by 2025, the average household would get an average $1,150 credit.

But, the plan would need legislative approval. Assembly Speaker Craig Coughlin, D-19th District, said in a Thursday afternoon statement that he would look at having the proposal incorporated into the state’s upcoming Fiscal Year 2023 budget.

Murphy, who is scheduled to present his budget address next week, said the goal of this Affordable New Jersey Communities for Homeowners and Renters  – or ANCHOR – program is to offset the costs of property taxes and rent in the Garden State.

“We’re going to deliver what we said we were going to deliver,” Murphy during the Thursday announcement at the Fair Lawn Municipal Building, speaking to his second-term promise of a higher focus on affordability. “Now is the time for greater and more permanent relief.”

ANCHOR would effectively replace the state’s existing Homestead rebate program, which serves an estimated 470,000 homeowners each year and provides for an average rebate of $626.

Meanwhile the Republican measure is expected to carry a $3 billion price tag that state lawmakers said would come out of the unexpected glut in tax revenue and other funds that New Jersey saw last spring.

“We want to give this unexpected and unneeded windfall back to New Jersey families who are struggling to get by with surging inflation,” reads a Thursday statement from one of the planned sponsors, Senate Republican Leader Steven Oroho, R-24th District. “We’re proposing direct tax relief that would put real cash back into people’s wallets quickly.”

Bad reputation

Figures like Murphy and leadership from the state Assembly and Senate Democrats offices – who control their respective chambers – contend that the party’s bruising defeats in the elections were borne from a public sentiment that not enough had been done to address the New Jersey’s reputation as one of the most expensive in the nation.

Several bills dealing with affordability are being heard in the state Senate Thursday afternoon, including one that expands the tax deductions for rent payments, and another that moves more state funds back into municipalities so they can plug holes in their budgets.

A bill approved by a Senate panel on Monday takes aim at so-called “bracket creep,” in order to shield New Jersey taxpayers from rising inflation rates not seen in decades. The proposed Senate Bill 676 would index the tax brackets annually for inflation.

Longtime proponents, like state Sen. Anthony Bucco, R-25th District, argue that the measure would protect New Jerseyans who are taxed at a higher bracket due to a pay increase, even if rising inflation and cost of living increases block any improvement to their financial situation.

The nonpartisan state Office of Legislative Services predicted in a Feb. 16 analysis that should it become law, S676 could cost the state anywhere between $150 million and $440 million in the next year, and more than $1 billion over the next several years if inflation continues to climb.

Other state subsidies for middle and lower-income New Jerseyans include tax credits for child care; a $500 rebate for families earning up to $150,000, which would benefit 760,000 New Jersey households; increased eligibility for the state’s earned income tax credit; property tax deductions and income tax credits for veterans; and property tax reimbursement for seniors.