A key state Senate panel approved a tranche of “affordability bills” meant to slash New Jersey’s notoriously high cost of living and property taxes, or at least take some of the pressure off of many Garden State residents and businesses.

Several of the measures approved on Feb. 28 by the Senate Budget and Appropriations Committee were also among the first bills discussed in the new voting session when they were heard a month ago at a Jan. 27 Senate panel.

“There’s no mistake our first committee that I authorized was on the singular topic of affordability and property tax relief,” the newly installed Senate President Nicholas Scutari, D-22nd District, said in a recent News12 New Jersey interview.

Accounting for inflation

One bill, which was heavily backed by Republicans for years, aims to end what’s known as the “bracket creep,” to shield New Jersey taxpayers from rising inflation.

Senate Bill 676 proposes to do so by indexing the different 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.

Such practices are in place by the federal government and dozens of other states, but New Jersey is among the few outliers, according to the Washington, D.C.-based Tax Foundation, which closely follows federal and state tax policies.

“Soaring inflation is making everything more expensive for New Jerseyans,” reads a prepared statement from another sponsor, Senate Republican Leader Steven Oroho, R-24th District. “Workers shouldn’t get slammed by higher tax rates when they get cost-of-living allowances that are meant to cover those higher costs.”

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.

In January, the national consumer price index hit 7.6%, putting it on track to reach its highest levels in decades and fueling price increases for rent, food, consumer goods, gas, housing and other basic necessities.

“Better aligning the state income tax brackets to natural wage increases is important to avoid unintended tax increases and to advance tax fairness and equity,” reads a statement from Christopher Emigholz, vice president of government affairs at the New Jersey Business & Industry Association. “This is especially true when inflation runs rampant.”

Offering relief

Another bill approved on Monday, S330, would shift funds under the Energy Tax Receipts – originally collected by municipalities, but now by the state – so that the money goes back to local towns and cities, rather than to plug holes in the state budget.

The proposal would shift $331 million a year for five years, following more than a decade of diversions beginning with the Corzine administration.

Meanwhile, S343 would boost the tax deduction that tenants could claim on their income taxes for rent costs from 18% to 30%, capped at $15,000 a year with an estimated benefit of $180 million in tax cuts for New Jersey families.

None of those measures have been heard on the state Assembly side.

The topic of affordability has been hotly discussed by Trenton’s top leaders since November’s elections – including Gov. Phil Murphy and Democratic leadership in the state Assembly and Senate – who contend voters gave Republicans sweeping victories because they felt those issues were not being addressed.

Figures like Murphy have vowed new, but unspecified, actions that could rein in costs, having touted a dozen tax breaks aimed at middle and low-income families. “But I’m not going to be satisfied with just slowing property tax growth,” he said during his second inaugural address on Jan. 18. “I want to get us to a place where we can begin to see them go down.”

The governor is scheduled to present his spending plan for the state’s next fiscal year on March 8, which would cover state expenses between July 1 and June 30, 2023. New Jersey’s current budget stands at a record-high $46.4 billion, chunks of which are supported by cash that is slated to dry up in the coming months.