Gov. Murphy's $49B NJ Budget Focuses On Property Taxes, Affordability

NEW JERSEY — With some of the nation's highest property taxes and the continued economic windfall of the pandemic, Gov. Phil Murphy emphasized affordability and tax savings Tuesday as he introduced his state budget proposal for the fiscal year of 2023.

The $48.9 billion budget — about $2.5 billion more than this year's — includes no new fees or tax hikes and reshifts the state's tax-relief programs, which would also include renters and not just homeowners. See the 101-page "Budget in Brief" here.

"This budget is rooted in a renewed commitment to moving our state forward, creating opportunity for every family, and making our state more affordable," Murphy told the state legislature.

The proposed budget includes the ANCHOR (Affordable New Jersey Communities for Homeowners and Renters) Property Tax Relief Program, which Murphy announced Thursday. Under the program, homeowners making up to $250,000 per year can receive an average $700 rebate in FY2023 to offset property taxes. Renters making up to $100,000 per year would become eligible for a rebate of up to $250.

During the Tuesday conference, Murphy proposed a three-year ramp-up for ANCHOR. By FY2025, property-tax rebates would swell to $1,150 on average per eligible household, with an annual state investment of $1.5 billion annually, according to the governor's administration.

ANCHOR would replace the Homestead Rebate Program, which aids 470,000 homeowners per year with an average benefit of $626. Renters aren't eligible under the Homestead program, so their inclusion in ANCHOR is designed to help offset costs of increasing rents tied to rising property taxes.

The ANCHOR program would impact an estimated 1.15 million homeowners and 600,000 renters, Murphy's administration says. Read more: 1.8M Eligible For Proposed NJ Property Tax Relief Program: Murphy

Additionally, NJ Transit vehicles will get Wi-Fi under the FY2023 budget, state officials announced Feb. 28. NJ Transit's fares won't increase under the budget, according to Murphy's administration.

Overall, NJ Transit's budget would increase by $106 million from FY2022, coming out to $2.76 billion. But the budget proposes no NJ Transit rate hikes for the fifth straight year. Read more: NJ Transit Fares Won't Increase Until At Least 2023: Murphy

Tolls, however, increased by 3 percent on the New Jersey Turnpike and Garden State Parkway. The increase was necessary to provide stable funding for capital needs, state officials said last year. Read more: Tolls To Increase On New Jersey Turnpike, Garden State Parkway

Murphy also proposed a new, $300 million Affordable Housing Trust Fund, designed to ease the burden on cities and towns in bringing affordable housing to their communities. Funding will come from the American Rescue Plan — a federal coronavirus-relief package President Joe Biden signed into law last year.

"This fund will help us build the entire current backlog of 3,300 already approved, but still yet-to-be-built, 100-percent-affordable housing units by the end of my second term," Murphy said.

New Jersey tends to have among the nation's highest property taxes. In fact, New Jersey had the highest average taxes on a $217,500 home ($5,419) than any state in 2022, according to WalletHub.

But the budget doesn't go far enough to provide inflation relief to New Jersey taxpayers, according to State Sen. Anthony M. Bucco, a Republican.

“When the Murphy administration is sitting on a huge windfall of taxpayer funds, there’s no excuse for anyone to oppose providing tax relief to workers when they get small cost-of-living raises to account for inflation,” Bucco said.. “I know Governor Murphy will never want to lower a tax, but it’s a small cost to the State when we’re swimming in money."

Murphy signed a bill last month delaying the annual budget address to the legislature to March 8. The governor requested an extension hoping that COVID-19 trends would allow the state to hold its first in-person budget speech in two years.

For New Jerseyans, that meant waiting longer to see how Murphy plans to spend billions in federal aid and whether he would make good on his pledge not to raise taxes, which he made during last year's campaign.

New Jersey's fiscal year ends June 30, when lawmakers and the governor must enact a balanced budget.

The Associated Press contributed to this report.