Proposed property tax cut for seniors could pave the way for NJ budget deal

New Jersey Gov. Phil Murphy and Democratic leaders in the state Legislature have agreed to compromise on a property tax cut for seniors, paving the way for a deal on the budget due by the end of the month.

The compromise would cut property taxes by half for homeowners who are 65 years or older. Assembly Speaker Craig Coughlin (D-Woodbridge) is sponsoring a bill that would restrict the tax cut to $10,000. The new agreement would lower the cap on the tax cut to $6,500, but that would rise as property taxes rise in future years.

So that means someone who pays $13,000 in property taxes or less would get the entire reduction. Those who pay more property taxes would get the maximum of $6,500.

Murphy’s chief concern about the tax cut was that it included wealthy homeowners. The compromise struck over the weekend would now exclude individuals or couples who earn more than $500,000 a year.

An administration official says the compromise also includes more help for renters and establishes a commission that will come up with recommendations on how to run StayNJ, the senior tax cut.

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"Ask Governor Murphy" returns Tuesday

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"Ask Governor Murphy” — your chance to present questions to New Jersey’s governor live, on-air — returns tonight, Tuesday, June 20 at 7 p.m. Listen live on WNYC.org or on the radio at 93.9 FM.

Send us your questions:

• Using this Google form before the show.
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Coughlin has made the bill a priority, putting it on a fast-track for approval, tying it to other popular measures and putting it squarely in the middle of budget negotiations. The bill additionally has the support of state Senate President Nicholas Scutari, a Democrat.

The Legislature must approve — and Murphy must sign — a budget by June 30, or the state would have to shut down all nonessential services on July 1.

The nonpartisan Office of Legislative Services had estimated the cost of the original proposal to be $1.2 billion a year. But the Murphy administration says the new estimated cost is $1.3 billion. The state will begin setting aside funds in each of the three years before the tax cut would take effect in 2026.

In New Jersey, property taxes are collected by each town and county to pay for schools, local services and the county budget. They vary from town to town and in each county. Essex County had the highest average residential property taxes in the state in 2022, at $12,910, according to the state Treasury. Essex is home to Newark — the state’s largest city — and a handful of affluent suburbs.