In case you missed it, here are the highlights from New Jersey Spotlight’s summary of New Jersey’s property tax breaks and rebates. JOHN REITMEYER, BUDGET/FINANCE WRITER for NJ Spotlight SEPTEMBER 18, 2023
The next round of state-funded Anchor property-tax relief payments are set to show up in the mailboxes or bank accounts of more than 1 million New Jersey residents (senior citizens and non senior citizens)within weeks.
But the extra Anchor income will not result in paying higher NJ income taxes. The money from Anchor property-tax relief benefits will not trigger higher income tax bills for homeowners receiving tax breaks worth as much as $1,750, according to the state Department of Treasury.
The wait for a game changing tax breakwill be much longer for seniors who were promised by lawmakers earlier this year their property-tax bills would be cut in half.
That won’t happen until 2026 at the earliest, under current law.
Still, New Jersey residents ages 65 and older will find out next year when they apply for Senior Freeze property-tax relief benefits that key changes enacted earlier this year will make it easier to qualify for benefits provided through that program.
Indeed, from the Anchor to Senior Freeze programs, to the promised program that would slash property taxes for seniors, much has changed recently when it comes to state-administered efforts to ease local property-tax bills that now average close to $9,500.
The following is a rundown of what’s new, and what still remains just a promise in property-tax relief.
Anchor
The first round of benefits paid out under Anchor, a program Gov. Phil Murphy and lawmakers established last year as a successor to the Homestead Benefit, totaled from $450 for eligible renters and up to $1,500 for eligible homeowners. Earlier this year, Murphy and fellow Democrats who control both houses of the Legislature announced eligible seniors — homeowners making up to $250,000 annually and renters making up to $150,000 annually — would receive an additional $250 in the next round of benefits. That will raise the maximum benefit to $1,750 for many eligible senior homeowners, and to $700 for eligible senior renters.
Last month, the Murphy administration also announced more than 1 million Anchor recipients were being automatically enrolled for the next round of benefits, and that those benefits would be paid out this year by Nov. 1. For its part, the Murphy administration is saying Anchor benefits will now be paid out annually every fall.
Senior freeze
As part of his affordability agenda, Murphy, in his February budget message, called for expanding eligibility for Senior Freeze, one of the state’s long-standing property-tax relief programs for senior homeowners and homeowners with disabilities. When a new state budget was enacted in late June, some key changes were approved by lawmakers that will make it easier for many seniors to qualify for reimbursement checks that are meant to “freeze” annual growth in their property-tax bills. They include expanding the program’s income limit, from $100,000 up to $150,000, and eliminating a 10-year residency requirement. A three-year homeownership requirement remains in place.
Some changes were approved that will make it easier for many seniors to qualify for Senior Freeze reimbursement checks.
Since applications for the current round of Senior Freeze benefits are being accepted through the end of October, changes enacted in late June won’t take effect until next year, according to the Murphy administration.
Meanwhile, another piece of legislation enacted by the governor and lawmakers in late June allows Senior Freeze recipients who see a one-time increase in earnings that takes their annual income over the program’s limit in a given tax year retain their base year of eligibility if their income the following year drops back under the program’s income ceiling.
Stay NJ
One of the newest wrinkles when it comes to state-funded property-tax relief initiatives is the creation, at least on paper, of the program that Democratic legislative leaders have dubbed Stay NJ. Under a law passed in late June, the state has begun setting aside hundreds of millions of dollars annually for promised relief benefits this program would provide to seniors in 2026, at the earliest.
A key provision of the envisioned program is the funding of tax credits that would be used to cut property taxes in half for many homeowners ages 65 and older, up to a maximum of $6,500 annually. Right now, senior homeowners making up to $500,000 annually would be eligible for the promised benefits.
The cost of Stay NJ could eventually rise to over $2 billion annually, according to the Legislature’s nonpartisan fiscal analysts.
The planned tax break has been widely praised by senior advocacy groups, but it has also drawn criticism for leaving out tenants, including those in communities of color, who pay property taxes indirectly through monthly rent payments.
This year, election campaign materials distributed by some incumbent Democrats have left the impression that property-tax bills have already been cut in half for many seniors, even though the debut of the promised Stay NJ program, by law, is still years off.
Moreover, some provisions of the Stay NJ law may make it more difficult for lawmakers to live up to their election-year promise if future state revenue growth does not keep pace with the projected annual cost of funding the promised benefit, which could eventually rise to over $2 billion annually, according to the Legislature’s nonpartisan fiscal analysts. Among a list of superseding spending priorities included in the Stay NJ law is funding for K-12 public schools and public-workers pension benefits, as well maintenance of a robust budget surplus.