Governor’s proposed Stay NJ benefit ‘too low,’ Assembly speaker says

The New Jersey Assembly’s top Democrat said he does not back proposed cuts to a marquee property tax relief program he championed into law.

Assembly Speaker Craig Coughlin said Wednesday during a telephone town hall hosted by AARP that he believes the $4,000 cap Gov. Mikie Sherrill has proposed for benefits from the Stay NJ property tax relief program is insufficient.

“I think the net cap on the benefit is something that’s important, and I think $4,000 is too low, candidly, so we’re trying to find ways to word it,” said Coughlin, a Middlesex County Democrat.

Under existing law, Stay NJ promises to cut the property tax bills of any seniors making less than $500,000 in half, to a cap of $6,500. But the $1.2 billion program has faced criticism over its financial feasibility since Coughlin first proposed it in 2023 as a way to prevent senior citizens from moving out of the state.

Though Stay NJ’s enabling legislation requires that, among other things, the state maintain reserves equal to at least 12% of annual spending, lawmakers have repeatedly overridden that requirement in budget language.

Spokespeople for the governor did not immediately return a request for comment.

Sherrill, a Democrat who took office in January, has proposed setting the Stay NJ benefit cap to $4,000 and lowering the program’s income limit to $250,000 in a bid to close the gap between New Jersey’s recurring spending and its yearly revenue. Those changes would lower the program’s costs to $642.1 million in the fiscal year that begins July 1.

Keeping the program’s maximum benefit at $6,500 but lowering the income limit as Sherrill has proposed would cost between $344 and $372 million more, Treasury officials said in a written response to questions from the Assembly Budget Committee.

The income limit would have to come down to about $125,000 to keep the benefit limit level at $6,500 without raising the program’s costs above about $600 million, the office said.

“We’re going to continue to work with the governor, but we’re going to continue to make sure that we stand up for Stay NJ because it is so important to the people on this call and in this state,” Coughlin said on Wednesday’s call.

Sherrill has proposed a $60.7 billion budget, a record amount. Her plan is now in the hands of lawmakers, who have until June 30 to return to her with potential changes.

Sherrill and members of her administration have repeatedly said the governor is open to spending increases as long as they are balanced by spending cuts. Under that paradigm, restoring full funding to Stay NJ would require sizable cuts elsewhere in the state budget.

In the current fiscal year, when the program paid a half-year’s benefit that effectively gave the program an annual cap of $3,250, it paid 467,676 New Jerseyans an average of $1,236, according to budget documents.

The average payout would rise to $1,456 under Sherrill’s plan for the fiscal year that begins July 1, and the number of beneficiaries would decrease to 443,974.