Gov. Murphy, NJ lawmakers tout 'landmark' senior tax cut deal

Gov. Phil Murphy and Democratic leaders in the New Jersey State Legislature are announcing a property tax break for seniors Wednesday that could significantly reduce living costs for anyone 65 years and older.

The governor opposed the original bill proposed by Assembly Speaker Craig Coughlin, but a compromise was reached over the weekend. The maximum break has been lowered from $10,000 a year to $6,500 and individuals or couples who earn more than $500,000 are not eligible.

“As you retire, most seniors are under these limits that we're talking about – 90 plus percent are under the 250,000 cap in most every county in the state – the property tax relief will be even more significant,” Murphy said on Tuesday evening on WNYC’s “Ask Governor Murphy.”

Coughlin calls the plan “StayNJ” because he wants seniors to be able to stay in the towns where they have lived and raised their kids. It cuts a senior’s property tax bill in half, up to the $6,500 maximum.

“We have made significant progress in our goal of making New Jersey more affordable for our seniors through legislation currently being proposed,” Coughlin said in a written statement. “I look forward to continuing to work with the governor and Senate president to finalize and deliver landmark property tax relief to ensure seniors remain in our great state well into their retirement years.”

The tax cut wouldn’t take effect until 2026 and the state would put aside $600 million before then to help defray the estimated $1.3 billion cost. The Murphy administration says it plans to save $100 million from this year’s budget, then $200 million next year and $300 million from the budget year that begins July 2025.

“This is not a program that we're going to be able to flip a light switch and begin on July 1. I also want folks to accept that we're going to need a period of time to leg into this,” Murphy said.

By lowering the maximum tax cut to $6,500, Murphy said he believed he and legislative leaders had balanced the needs of seniors with fiscal constraints currently facing the state.

“You want to deliver as much affordability as possible to as many strata of your residents,” Murphy said. “But at the same token, I don't want to give up the enormous progress, hard fought progress, we've made to get our credit ratings back into shape.”

Murphy cited the payments he has made to the state pension plan and a rainy day fund that puts some state funding in reserve.

He and the legislature must agree on a budget by midnight June 30. The senior tax cut was the key sticking point standing in the way, the governor said.