Tax break for seniors bill headed to full Legislature for vote

By: - June 28, 2023 5:16 pm

The bill would give senior homeowners a tax credit of up to $6,500 starting in 2026. (Fran Baltzer for New Jersey Monitor)

A voluminous new tax relief proposal targeting New Jersey seniors is on its way to a full vote in the Legislature Friday, despite complaints that the tax credits won’t reach taxpayers for nearly three years.

The program, called StayNJ, would afford a new property tax credit to residents 65 and older. The credit — which has a cap of $6,500 — is intended to cut property tax bills in half for seniors with less than $500,000 in annual income.

The bill, which has been criticized by some progressives as a giveaway to wealthy homeowners, cleared the Senate’s budget committee Tuesday and won approval from the Assembly’s budget panel Wednesday afternoon. Both votes were unanimous.

“This is a game changer for New Jersey’s seniors who are getting squeezed by escalating expenses,” Senate President Nicholas Scutari (D-Union), a sponsor, said in a statement.

Filers would receive either their StayNJ award or the combined benefit from the Anchor tax rebate and senior freeze programs — which effectively locks in qualifying seniors’ property tax bills — whichever is higher.

Awards under StayNJ — a program expected to cost $1.3 billion annually — would first go out in January 2026.

Lawmakers are funding the program over a period of years, depositing $100 million into a fund in the fiscal year that begins July 1, $200 million in the following fiscal year, and $300 million the year after.

Critics have raised concerns that the program would disproportionately benefit wealthy seniors with more expensive homes.

“Majority of the benefits in the community go to the top 40% of households, whereas a very small amount goes to the lowest 20%,” said Peter Chen, a senior policy analyst at progressive think tank New Jersey Policy Perspective. “This continues to be a pattern with property tax relief, and it’s overwhelmingly going to wealthier households.”

Gov. Phil Murphy, Scutari, and Assembly Speaker Craig Coughlin (D-Middlesex), the bill’s prime sponsor in the lower chamber, last week said they would increase tax rebates for seniors under Anchor in the coming fiscal year to provide some immediate assistance to New Jersey seniors.

Those changes would increase Anchor awards for senior homeowners and renters by $250 each, meaning senior homeowners could receive $1,250 or $1,750 based on their income, and senior renters would get $700.

The StayNJ bill would also increase the income limit for senior freeze, raising it from $100,000 to $150,000, and reduce the number of years a resident must have used a house as their primary residence from 10 years to three years to qualify for the program.

“We’ve been saying, ‘Give money back, give money back.’ In some respects I would say — the Democrats would disagree — that they felt pressured to give some of this money back,” said Sen. Steve Oroho (R-Sussex), his chamber’s minority leader.

Republicans on the Senate’s budget committee attempted Tuesday to pass amendments that would have required StayNJ tax credits to go out in the coming fiscal year. Democrats defeated their amendments but not without a defection.

Sen. Paul Sarlo (D-Bergen), the chamber’s budget chair, said Democrats had agreed to phase in funding for the program to preserve the state’s cash reserves and avoid credit rating decreases that might come from draining the surplus.

Sen. Andrew Zwicker (D-Middlesex) voted against his party’s motion to table the Republican amendments, calling the GOP’s proposal “a reasonable ask.”

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Nikita Biryukov
Nikita Biryukov

Nikita Biryukov most recently covered state government and politics for the New Jersey Globe. His tenure there included revelatory stories on marijuana legalization, voting reform and Rep. Jeff Van Drew's decamp to the Republican Party. Earlier, he worked as a freelancer for The Home News Tribune and The Press of Atlantic City.