This story is part of our comprehensive coverage of the upcoming November elections. A wealth of information is also available from our voter’s guide. Affordability has become an oft-repeated buzzword inside the State House as inflation, rising property-tax bills and soaring rents have strained the budgets of many New Jersey residents.
Not surprisingly, addressing affordability has become a key emphasis for Democratic lawmakers hoping to hold onto majorities in the Assembly and Senate in this fall’s legislative elections.
Under their leadership, majority Democrats have established an altogether new state-administered property-tax relief program called Anchor, and they are also promising senior homeowners more help is on the way, all under the banner of improving affordability.
They’ve also created a child tax credit that is now among the nation’s most generous. An annual, late-summer sales-tax holiday covering many school-related items has also been established to help ease costs for many New Jersey families.
But Republicans seeking to reduce the Democratic majorities or even take control of the Legislature itself this year, argue not enough is being done at the state level to help residents struggling to cover their property tax bills and other rising costs.
Republicans have their own ideas about making New Jersey more affordable, from criticizing how the current Legislature has been distributing K-12 public school funding to calling for reform of New Jersey’s income-tax brackets in response to inflation,
They’ve also been highlighting a significant increase in overall state spending that has occurred during the tenure of Democratic Gov. Phil Murphy and have attempted to connect that to the affordability issue, as well.
High cost of lowering property taxes
To be sure, one of the key areas where state spending has ramped up significantly during Murphy’s two terms in office has been funding for the state’s direct property-tax relief initiatives.
Last year, Murphy and fellow Democrats created the Anchor program, which provides homeowners and renters with relief benefits, ranging from $450 to $1,750, depending on age and income.
Anchor, which replaced the longstanding Homestead Benefit, has debuted at a time when average property-tax bills continue to rise across the state, hitting a record high of $9,490 in 2022, according to data collected by the state Department of Community Affairs.
Distribution of the latest round of Anchor benefits has already begun, with a group of eligible homeowners and renters whose applications were automatically filed over the summer among those receiving the first payments via direct deposit, according to Department of Treasury officials.
The new benefit includes a $250 increase for homeowners and renters ages 65 and older thanks to legislation enacted in late June by Murphy and lawmakers, as part of a new state budget that hiked overall spending to a record $54.3 billion.
Democratic distribution
“Making our state more affordable is our top priority and we are delivering,” Assembly Speaker Craig Coughlin (D-Middlesex) said as the distribution of Anchor benefits began last week.
“This is direct tax relief that will help make their lives more affordable,” said Sen. Nicholas Scutari (D-Union).
Meanwhile, Murphy and Democratic legislative leaders are also promising on the eve of the election to launch another relief program, specifically for seniors. It’s being called “Stay NJ,” but that program is not scheduled to come online until 2026, at the earliest, under current law.
For their part, many Republicans have not questioned the majority’s focus on tax relief in the run-up to this year’s legislative elections, but they have been calling for more of it. What they have openly questioned is the timing of the latest distribution of Anchor benefits by the Murphy administration, since it is occurring so close to the election.
Impermanent solution
“Homeowners want and need a permanent solution to our crippling, highest-in-the-nation property taxes, not a one-time rebate delivered in the weeks leading up to an election,” said Sen. Anthony Bucco (R-Morris).
Republican lawmakers put forward their own affordability proposal earlier this year, but it failed to gain traction with majority Democrats. Among other things, GOP lawmakers called for using state funding to blunt highway toll increases and to offset payrolltax hikes needed to sustain the state unemployment fund.
The GOP plan also called for fully offsetting cuts in aid that many K-12 public schools have faced under New Jersey’s current school-aid laws, cuts that they say are putting more pressure on property taxes in those communities.
For many New Jersey homeowners, the largest portion of the revenue raised through their local property taxes underwrites local school budgets.
Meanwhile, Republicans this year have also renewed calls for establishing a state income-tax deduction for charitable contributions and for linking the state’s income-tax brackets to inflation to prevent what’s known as “bracket creep,” which occurs when wage increases push taxpayers into a new tax bracket, even though they are no better off financially due to similar increases in inflation.
The surge to record-high state spending that’s occurred under Murphy and a majority-Democratic Legislature has also become a frequent topic for Republicans seeking to make inroads on the affordability issue.
They include Joe Miller, a Republican attempting to unseat incumbent Democrats who represent the 5th legislative district in the Assembly, according to the Miller campaign’s response to a questionnaire distributed to candidates for the New Jersey Decides voters guide, which is being compiled by NJ Spotlight News and a statewide coalition news outlets, led by the Center for Cooperative Media at Montclair State University.
“Excessive government spending directly impacts property taxes, making homeownership less affordable for many,” the Miller campaign indicated in the response. “(A) commitment to fiscal prudence is not only a path to lower property taxes, but also a means to enhance the overall economic well-being of all New Jersey residents.”
