Key to the budget negotiations was the creation of the new property tax relief program for seniors, dubbed StayNJ. The plan will provide tax credits worth half a senior’s property tax bill up to $6,500 for incomes up to $500,000. Benefits for the program do not go out until January 2026.
Lawmakers — who are all up for election this November — were eager to frame the budget through the lens of affordability.
“When I took office, in partnership with the speaker, [we] made sure that every decision that we made had to do with affordability,” Senate President Nick Scutari said during a press conference. “We don’t need polling data to know that taxes are generally the number one issue. This budget reflects those important moral values.”
The budget signing concluded a chaotic week in the process. Although Murphy and Democratic lawmakers reached a deal well ahead of the June 30 deadline, Democratic lawmakers advanced the budget bill — which was not made public at the time — late Wednesday night to meet procedural deadlines. Democrats advanced the budget with initially flawed summaries and barred public comment.
The budget bill passed the Senate and Assembly earlier Friday with some bipartisan support. Three GOP state Senators and six GOP Assemblymembers voted in support of the measure.
The budget incudes doubling the child tax credit and the third consecutive full pension payment, worth around $7 billion.
It also included an $8.3 billion surplus — keeping it flat. Murphy had proposed boosting it to $10 billion to cushion expected economic downturn; it’s not clear why he and lawmakers didn’t add more savings.
The spending plan did not include an extension of the corporate business tax surcharge — an additional 2.5 percent tax for companies with over $1 million in taxable income — which is slated to expire at the end of the year. Lawmakers could still exercise the option to extend it later this legislative session.
The budget spends $892 million in federal pandemic relief funds. Murphy can also spend another $100 million without legislative approval.
The budget also sets aside approximately $2 billion for the ANCHOR property tax relief program, which provides rebates to homeowners and renters. As part of the deal Murphy reached with legislative Democrats, seniors will get an additional $250 in ANCHOR benefits.
The StayNJ property tax relief plan had shaped up to be among the more contentious parts of the budget negotiations because Coughlin initially proposed it with no income caps and credits worth half a seniors’ property tax bill worth up to $10,000. The governor’s office initially planned for a potential shutdown, citing concerns around cost and equity. But the final product included eligibility thresholds, smaller benefits and more money back for renters.
Murphy defended keeping the extra $1.2 billion from the Legislature. He described it in terms he often uses.
“There are some extraordinary investments that are being made,” Murphy said. “This is a compromise. We go back and forth. But this is literally a game-changing budget and I can’t say enough good things about.”