Assembly speaker unveils $1.4 billion senior aid proposal, but its fate is unclear
Assembly Speaker Craig Coughlin on Thursday unveiled more details of his proposal that would offer elderly New Jerseyans a property tax break of up to $10,000, but it’s far from clear whether the measure will be approved in the upcoming budget amid Gov. Phil Murphy’s concern over the program’s cost and broad pool of recipients.
The speaker’s proposal, dubbed StayNJ, would offer eligible homeowners over 65 a property tax credit equal to half of their property tax bill — averaging $4,795 — beginning in January 2025.
“This is the time to take that step and say to seniors, ‘We want you to stay,’” said Coughlin (D-Middlesex).
New Jersey seniors already qualify for the property tax rebate program known as Anchor, which offers homeowners rebates of up to $1,500, and the senior freeze program, which essentially locks in property tax rates for eligible homeowners. Residents who qualify for awards under StayNJ would receive the higher of that benefit and the combined benefit offered by Anchor and the senior freeze.
Unlike the existing two programs, StayNJ’s credit would be applied directly to property tax bills instead of offering reimbursement later.
Murphy has raised concerns about the program’s lack of income caps or other forms of means testing, saying the program would send awards to residents who need no aid to remain in the state.
“I don’t think we should be in the business of giving the likes of me tax breaks,” Murphy told reporters in Asbury Park Thursday.
Coughlin said the lack of means testing is by design.
“We want all the seniors in New Jersey to stay in the state and to be encouraged to make the decision to stay here against competing with other states that are perceived to have lower taxes,” he told reporters Thursday.
The disagreement among top Trenton Democrats comes as the Legislature faces a June 30 deadline to pass a budget for the next fiscal year, which begins July 1.
The speakers’ proposal is paired with two other bills meant to reduce seniors’ health care costs. The first would remove asset tests required to qualify for Medicare Savings programs that offer health care subsidies to low-income seniors and raise those programs’ income limits to twice the federal poverty level.
Coughlin said the changes would make Medicare Savings plans available to roughly 163,000 more residents and would save them an average of $2,200.
Another bill in the package would increase income limits for a state program offering drug assistance to seniors and people with disabilities to four times the federal poverty level, an increase of roughly 38% for unmarried residents and 60% for married ones.
Those who don’t qualify for that program would automatically be enrolled in Senior Gold, which also offers prescription drug assistance.
Those provisions appear to have some support from the governor, with some caveats.
Though Murphy said he backs additional aid for elderly residents, he raised concerns about the cost, saying it’s not clear New Jersey can afford to fund the programs as revenue begins a post-pandemic decline and amid lingering uncertainty about the state of the U.S. economy.
The combined annual cost for Coughlin’s proposals is roughly $1.4 billion, though much of those costs would not be realized until the StayNJ program finishes phasing in over the course of four budgeting years.
It would initially be funded with two $300 million deposits in the current and coming fiscal years, with another $600 million added during the next year. Thereafter, the annual deposits would increase by $200 million each year before plateauing at $1.2 billion in the fiscal year that begins July 2027.
The drug and health care assistance programs are expected to cost a combined $238 million annually.
“This plan was contemplated without any kind of a tax increase. I think spending priorities are just that — priorities,” Coughlin said. “When we put our shoulder to it, we know we can get these things done, even if they’re expensive.”
Officials from the Treasury and nonpartisan Office of Legislative Services this month said the state would collect $2 billion less than previously expected during the current and coming fiscal year, a decline that means the state will again spend more money than it brings in.
Senate President Nicholas Scutari (D-Union), who earlier this week floated an apparently doomed proposal to fund Coughlin’s plan by extending a 2.5% surtax on business profits above $1 million, reiterated his support for the speaker’s proposal Thursday afternoon.
“I am committed to working with the speaker and sponsor legislation for meaningful property tax relief for seniors. Affordability is the primary consideration in whether senior citizens can remain in their homes,” he said in a statement. “I will explore any option that can help them stay in New Jersey and continue to enjoy our great state.”
Democrats in the Legislature are unlikely to get much aid from the chamber’s Republicans, who called the speaker’s proposal a political maneuver meant to entice voters ahead of this year’s legislative races. All 120 legislative seats are on the ballot in November.
“This is just another attempt to bribe people with their own money ahead of an election,” said Assemblyman John DiMaio (R-Warren), the chamber’s minority leader. “Lowering property taxes means actually lowering the tax bill, not taking people’s money and giving some back. We need structural changes to do that.”