Major Property Tax Rebate On The Line In $50.6B NJ Budget Vote

TRENTON, NJ — Lawmakers got closer to sending Gov. Phil Murphy a record-high $50.6 billion budget plan for the 2023 fiscal year. A major overhaul to property-tax rebates, a state-level child tax credit program and several tax holidays stand out among the measures Democrats say will help make New Jersey more affordable.

But the budget is filled with late changes, which dominated Monday's legislative meetings. Republican lawmakers claimed Democratic lawmakers haven't shown transparency in the last moments of the budgetary process.

The Budget Committees on the State Senate and Assembly approved the spending plan along party lines. The full State Legislature expects a Wednesday vote, clearing the way for Murphy to sign the budget into law before the deadline at the end of Thursday. That's the deadline for the administration and legislature to agree on a budget to avoid the threat of a state-government shutdown.

Ever since Murphy introduced the budget plan in March — then valued at $48.9 billion — Democratic leadership has touted "affordability" measures. With federal COVID-relief money and unexpectedly high excess tax revenues, the budget will increase spending by 9 percent over the current fiscal year's.

Murphy and Democratic leaders have announced intentions to expand the proposed Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) Tax Relief Program. The program, which would replace the Homestead Rebate, would provide an average benefit of $628 to more than 2 million homeowners and renters for a total of about $2 billion in relief.

Read more: This Is How Much Property Tax Relief You'll See In New NJ Program

Rebates, Tax Holidays

Here's a breakdown of how much New Jerseyans would save under the ANCHOR proposal, according to the Murphy administration:

Homeowners with a household income of less than $150,000

• Rebate: $1,500
• How many households impacted: 870,000
• Total cost: $1.31 billion

Homeowners with a household income between $150,000 and $250,000

• Rebate: $1,000
• How many households impacted: 290,000
• Total cost: $290 million

Renters with incomes up to $150,000

• Rebate: $450
• How many impacted: 900,000
• Total cost: $405 million

Murphy, Senate President Nicholas Scutari and Assembly Speaker Craig Coughlin also announced a sales-tax holiday on back-to-school supplies from Aug. 27 to Sept. 5. Read more: NJ Sales Tax Holiday Coming For Limited Run

The budget also features one-year fee holidays for driver’s license renewals, marriage licenses and state park entry.

Late Changes, Disputes

As committees discussed the budget without publicly available text Monday, last-minute changes dominated discussions — as did claims of a lack of transparency.

During the Assembly committee hearing, Assemblymember Nancy Munoz (R-21) submitted an amendment that would permanently exempt back-to-school items from the state's 6.625 percent sales tax.

But Assembly Majority Whip Carol Murphy (D-7) told Munoz she didn't give the committee enough advanced notice to amend the bill.

"I would love to have seen the amendments as presented by my colleagues across the aisle presented to the sponsor," Carol Murphy said. "I think that would have had a great opportunity for us to have advance notice of the amendments especially since I do not see my colleagues on the bills that they are presenting amendments for. So with that, I vote yes to table."

Republican Budget Officer Hal Wirths (R-24) called out Democrats for also bringing forth late changes.

"My colleagues on the other side of the aisle haven’t seen the amendments and we voted on bills today and we haven’t even seen the bills," Wirths said. "To save taxpayers money, I think it’s a pretty safe bet to take the vote. If we are going to call out the bills, let’s call them all out."

One Assembly dispute centered around the state child tax credit. The Democratic proposal would give $500 to eligible families with children 6 or younger. The proposal would provide direct cash payments on annual tax-refund checks to families with young children in households that earn less than $80,000 annually.

Payments would total $500 for each eligible child for incomes up to $30,000, with payments reduced by $10 for each $1,000 earned over $30,000. For instance, a household earning $60,000 would receive $200 for each eligible child. The bill would impact an estimated 400,000 children — about two-thirds of young children — in the state, according to lawmakers supporting the measure.

Assemblymember Aura Dunn (R-25) proposed an amendment that would provide a per-child tax credit for families earning up to 250 percent of the federal poverty level. For instance, a family of four earning up to $69,375 would be eligible.

"Tax cuts significantly help people, especially in this great time of need," Dunn said. "Low-income and middle-class families need all the relief they can get, and the proposed substitute provides greater relief than the bill on the agenda today."