The good news for New Jersey taxpayers: A rebate is coming.
The state, flush with cash from better-than-ever-dreamed-of revenues during the pandemic, is ready to give money back to taxpayers.
The questions are: How much, to whom and when?
On Thursday morning, Gov. Phil Murphy unveiled the ANCHOR Property Tax Relief Program — an initiative he said would distribute $900 million in property tax relief to nearly 1.8 million homeowners and renters across the state during Fiscal Year 2023.
Because it is building upon the Homestead Rebate (greatly expanding eligibility while it does), Jerseyans would see their first checks in spring of 2023.
Here’s how Murphy’s plan works:
- Homeowners making up to $250,000 per year are eligible to receive an average $700 rebate;
- Renters making up to $100,000 per year are eligible for a rebate up to $250 to help defray the cost of rent increases due to property taxes;
- The program would increase over three years. By FY2025, property tax rebates provided as part of the program would swell to $1,150 on average per eligible household, with the annual state investment in the program up to $1.5 billion annually.
“This program will provide direct property tax relief to households regardless of whether they own or rent,” Murphy said. “While the state does not set property taxes, we believe that we must take action to offset costs and make life in New Jersey more affordable.
“Through the ANCHOR Property Tax Relief Program, we can provide real support for families and seniors, helping them stay in the homes and communities they love.”
The program is able to occur thanks to far-better-than-expected tax revenues. The state had projected its major tax revenues would decline by more than 5% this year. In reality, the latest figures show the state’s revenues not only increased — but by at least 20%.
These numbers are leading to legislation by the Senate Republicans.
The Senate Republicans, who said they anticipate that Murphy will announce during his budget address that the state has collected at least $3 billion more in taxes than he budgeted this year, said the state needs to return that cash.
Senate Republicans will introduce legislation to help New Jersey taxpayers immediately.
Here’s how their plan works:
- The money would be given back as a refundable tax credit on 2021 state income tax returns to taxpayers with a gross income of $500,000 or less;
- The tax credit is $500 for individuals who are single or married and filing separately and $1,000 for those filing jointly, as a head of household, or as a surviving spouse;
- The credit is refundable, meaning that any excess credit beyond the taxpayer’s tax liability would be paid to the taxpayer in the form of a tax refund;
- Taxpayers who have already filed their tax returns for 2021 would not be required to amend their returns to get the refundable credit. It would be sent to them automatically by Treasury.
The Senate Republicans are asking: Why wait? Residents need money now. After all, they said, it’s the taxpayers’ money.
“If Gov. Murphy’s bad financial projections resulted in taxpayers paying billions more than needed, Senate Republicans believe we should give it back to New Jersey families hit hard by inflation,” Sen. Declan O’Scanlon (R-Holmdel) said.
“Under our plan, overtaxed New Jerseyans would get their money back this spring through tax credits of $500 or $1,000 based on filing status. There’s no complicated formula, just money back in the pockets of New Jerseyans in a simple, fair and transparent manner.”
The catch: The Republican plan may only be for one year — although they said they are hopeful to continue to give rebates, assuming revenues continue to soar.
Which program will be adopted? That’s an easy one: Which party controls the Legislature?
After all, Assembly Speaker Craig Coughlin (D-Woodbridge) already has voiced enthusiasm for Murphy’s plan.
“I am excited by the prospect of addressing property taxes to bring meaningful savings to New Jerseyans, and commend the governor for this bold proposal,” he said. “As speaker, I fought to restore and fully fund the Homestead rebate.
“I look forward to working for homeowners and renters to achieve more affordability for middle class and working families. The Assembly will immediately begin our work to review the proposal and details as part of our annual budget review process.”