$2B In Proposed NJ Tax Relief Would Help 5.5M People, Gov. Murphy Says

Update: This article now contains a statement from Assembly Republican Leader John DiMaio.

NEW JERSEY — More than 2 million New Jersey homeowners and renters would receive $2 billion in relief under an expansion of a tax-relief program proposed in the state budget, Gov. Phil Murphy and Democratic leaders announced Wednesday.

If passed, the ANCHOR (Affordable New Jersey Communities for Homeowners and Renters) Property Tax Relief Program would impact 5.5 million New Jersey residents, according to the Murphy administration's estimates.

The Garden State has the nation's highest effective property-tax rate, according to Quicken Loans. Inflation and pandemic-related economic consequences have made it more difficult for many residents to keep up with New Jersey's cost of living.

Murphy's announcement comes weeks before the July 1 deadline for enacting the state budget. The proposal expands on his administration's proposal to replace the Homestead Rebate with the ANCHOR program, which Murphy introduced earlier this year as part of his budget proposal for Fiscal Year 2023.

The new plan would expand the ANCHOR program that the administration originally pitched, which would have distributed $900 million in property-tax relief for nearly 1.8 million homeowners.

The updated plan would increase the number of homeowners and renters who qualify for relief from the program. That includes:

• property-tax relief of $1,500 for 870,000 homeowners with incomes up to $150,000
• relief of $1,000 for 290,000 homeowners making between $150,000 and $250,000
• $450 for 900,000 renters with incomes up to $150,000 to help offset the burdens of rising rents

The average New Jersey property-tax bill in New Jersey was $9,284 in 2021 — among the highest in the nation. The state's current Homestead Rebate Program aids about 470,000 homeowners, with an average annual benefit of $626 and no relief for renters.

"For a middle-class family, getting that $1,500 in direct relief, that average bill would become $7,800," Murphy said. "The last time the statewide average property tax bill was lower than $7,800 was 2011."

Under the original ANCHOR plan proposed in March, eligible households would've received an average rebate of nearly $700 in FY2023. A three-year ramp-up would've brought the average savings to $1,150 per household by FY2025.

But Democratic leaders say the recently discovered windfall of $7.8 billion in tax revenue positioned New Jersey to expand relief from the ANCHOR program.

"We’re not focused on one-time relief, as some in Trenton are," Murphy said. "We’re not focused on tax-break gimmicks that would overly benefit those at the top, and we’re not focused on giveaways to big corporations. That’s all been tried before. Those broken promises and misguided priorities are part of why middle-class families felt that no one in Trenton cared about them to begin with."

Several Democratic leaders — including Assembly Speaker Craig Coughlin and Senate President Nicholas Scutari — touted Murphy's proposal to expand the ANCHOR program.

But Republican lawmakers have said that the state over-collected more than $9 billion in taxes and have proposed alternative programs for tax relief. GOP proposals include the "Give It Back" tax rebate, which advocates say would return $1,000 to New Jersey families as soon as its enacted. Additionally, the Republican-backed Gas Price and Inflation Tax Credit Act would provide another $500 rebate to counter record-high gas prices.

Assembly Republican Leader John DiMaio called the proposed ANCHOR expansion "a big-government gimmick."

"Injecting steroids into Murphy’s recycled rebate program won’t get anyone more excited about it than when Murphy announced it in February," DiMaio said in a statement. "It doesn’t deliver meaningful changes in fiscal policy and will be the first program to get cut when money is tight."