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Assembly speaker’s senior tax cut bill clears panel


Assembly speaker’s senior tax cut bill clears panel

Jun 08, 2023 | 5:41 pm ET
By Nikita Biryukov
Assembly speaker’s senior tax cut bill clears panel
Assembly Speaker Craig Coughlin said Thursday that financial burdens facing senior citizens in New Jersey “threaten their dream of a peaceful retirement in the homes that they cherish.” (Dana DiFilippo | New Jersey Monitor)

An Assembly panel advanced a controversial tax break plan for New Jersey seniors Thursday without changing provisions that have drawn criticism from Gov. Phil Murphy, progressive advocates, and some Democrats in the Legislature.

The Assembly Aging and Senior Services Committee approved a three-bill package that would offer elderly New Jerseyans a tax credit equal to half of their property tax bill — up to $10,000 — and loosen eligibility rules for drug and health care assistance programs aimed at the elderly.

“Far too many of our neighbors face financial burdens during their golden years,” said Assembly Speaker Craig Coughlin (D-Middlesex). “Those challenges face and threaten their dream of a peaceful retirement in the homes that they cherish, in the communities that they built, with the people that they love. We need to protect that.”

The controversial tax cut proposal, called StayNJ, has drawn opposition from Murphy and his administration, who have charged the bill would sorely strain already sagging state revenue, deliver most of its aid to residents who didn’t need it, and be impossible to administer.

The proposal would offer residents ages 65 and older a tax credit equal to half of their property tax bill. Eligible taxpayers could take advantage of the SaveNJ credit or the combined benefits from the existing Anchor and senior freeze tax break programs, whichever amount is larger.

Witnesses who testified Thursday and Assemblywomen Sadaf Jaffer (D-Middlesex) and Beth Sawyer (R-Gloucester) said the program would disproportionately benefit wealthy residents with more expensive homes and larger property tax bills.

“It rewards the people who need it the most the least and rewards the people who need it the least the most,” said Jaffer, who does not sit on the panel and who spoke as a witness.

The assemblywomen and others noted the bill would offer no aid to seniors who rent. About a quarter of all seniors in the state are renters, according to the Center Budget and Policy Priorities, including majorities of Black and Hispanic residents ages 65 and up.

Coughlin said he would seek to expand awards for renters under the Anchor program from $450 to $500. Awards for homeowners under Anchor are $1,000 or $1,500, depending on income.

The StayNJ bill received plaudits from some local officials and the AARP, which noted that elderly New Jerseyans still contribute to the state’s economy and provide child care to family members.

Senior citizens should not be pushed out of the state just because they can no longer afford to stay, they said.

“This bill would give our seniors an extended vested interest in the future of the towns where they currently reside, knowing they’ll have a financially feasible future in our great state of New Jersey,” said Monroe Mayor Stephen Dalina.

Making nice with Murphy

In an apparent olive branch to the governor, the panel amended the StayNJ bill to loosen eligibility rules for a separate property tax relief program aimed at the state’s elderly, mirroring a proposal Murphy made in his budget address.

The amendments would raise the income cutoff for the senior freeze program to $150,000 and allow seniors to qualify for the program if they’ve owned and lived in their home for three years, instead of the 10 years required under current law.

The amendments did not change any provisions governing StayNJ.

Administration officials have savaged the bill for its lack of means testing, frequently noting that Murphy — a millionaire whose property tax bill hovers around $200,000 — would get a $10,000 credit under StayNJ.

George Helmy, the governor’s chief of staff, called Coughlin a “strong partner” on tax relief but acknowledged the two camps are far apart on StayNJ.

“While we have serious challenges with the current version of the bill, we share the goal of streamlining the process and delivering even more tax relief to our seniors,” Helmy said in a statement Thursday. “We look forward to working closely with the speaker to see this relief delivered in this budget.”

Administration officials have also raised concerns about its cost amid declining state revenue. Treasury and the Office of Legislative Services last month released updated April revenue forecasts that predict tax collections would come in $2 billion lower during the current and next fiscal year.

On Tuesday, a Treasury spokesperson told the New Jersey Monitor that the state had missed those revised revenue targets by more than $500 million for May.

Assembly lawmakers have proposed an initial $600 million appropriation for StayNJ, with a $1.2 billion price tag once the program is fully phased-in in 2027, though others have said that price tag undersells its costs because property taxes will continue to rise in the interim. StayNJ awards would first be paid out in 2025.

Republicans wait in the wings

Though Sawyer suggested Coughlin’s proposal is meant to woo elderly voters ahead of November’s legislative elections that will put all 120 Statehouse seats on the ballot, StayNJ has won hesitant plaudits from some Republican lawmakers.

Assemblywoman Diane Gove (R-Ocean) voted in its favor during the committee hearing — Sawyer was the only one to vote no — and Assemblyman John DiMaio, the chamber’s Republican leader who also questioned the bill’s timing, said he might vote to send the bill to Murphy’s desk.

“We haven’t discussed it as a caucus yet, but the reality is it’s a tax cut. We’re not necessarily opposed to that. We just think it could be broader and help more of our state’s population across the board,” DiMaio said. “I’d say there’d be support, and I may even support it myself if this is the only option the majority party would be likely to post.”

DiMaio said he’d prefer an Assembly Republican plan announced in February that would shift a greater share of school funding costs onto the state while requiring towns to make proportional cuts to their property tax collections.

Senate Republicans have proffered a separate plan that calls for the state to send $4.3 billion to towns and counties, requiring the money be used to pay down local debt or forgo borrowing.