Gov. Phil Murphy and state legislative leaders today announced an agreement on middle-class tax relief and property tax relief measures in the Fiscal Year 2022 Budget.
The agreement calls for the budget to include $319 million for middle-class tax rebates, including direct checks of up to $500 for more than 760,000 families. Checks will begin to hit mailboxes in July.
Additionally, the Fiscal Year 2022 Appropriations Act will update Homestead Benefit Program payments so that they are based on 2017 property tax information, which is the most recent payment information available, instead of 2006 records. This change is estimated to increase the average benefit for seniors and disabled homeowners by over $130 and the average benefit for lower-income homeowners by $145. The estimated program cost is nearly $80 million.
The agreement also includes the extension of the Veterans Property Tax Deduction to peacetime veterans – an extension approved through a 2020 ballot measure – which has an estimated foregone revenue cost of $15 million, as well as an expansion of the Earned Income Tax Credit (EITC) age of eligibility from 21 to 18, and to those over the age 65.
“It has been a very constructive process,” Murphy said of the budget talks at today’s COVID-19 press briefing. “Stay tuned, there are a lot of moving parts. When we can talk about the entirety of the budget, I think it is going to be one that we can all look to and say that it makes the investments, provides relief, and is balanced – including investments addressing structural deficits that have been building in the state for decades.”
The agreement announced today also includes an expansion of the Child and Dependent Care Credit (CDCC) so that it is both available for families making up to $150,000 and refundable. This change is expected to benefit over 80,000 more families and is estimated to cost $17 million, according to the Murphy administration.
“This is direct tax relief to middle income families and senior citizens who need it most,” said Senate President Steve Sweeney. “The income tax rebate will put money into the pockets of working families so they can support themselves and their children. The increased Homestead Rebates will help ease the heavy property tax burden on middle-income homeowners. This extra assistance is especially important for senior citizens on fixed incomes so they can continue to live in their home communities. These benefits will be spent in the local economy, generating jobs and business activity in communities across the state.”
“With these measures we’re building on the promise to make New Jersey more affordable and stand up for its working families and seniors,” added Assembly Speaker Craig Coughlin. “I am thankful for the Governor and Senate President’s partnership in ensuring the responsible expansion and strengthening of our state’s commitments toward middle-class tax relief. Through the promise of greater financial security, together these measures will generate more opportunities for residents and our economy to thrive.”
Senator Steve Oroho (R-24), however, said the agreement didn’t go far enough, particularly with New Jersey’s $10.1 billion surplus.
“Despite the State receiving a $5 billion tax windfall in recent weeks, Democrats are proposing no significant new tax relief for New Jerseyans,” Oroho said in a statement. “That stands in stark contrast to our Republican plan to significantly boost tax relief and fix long-standing structural budget issues. It’s likely we’ll see a spending spree of epic proportions for legislative add-ons when the final details of the budget are released.
“In total, the new ‘tax relief’ items listed by the governor and legislative leaders in the news relief total just $125 million,” he said.
Additional details on each tax relief measure announced today are as follows:
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