The deal reached on the framework of a new StayNJ senior citizen property tax plan — which is part of a greater framework to get the state budget passed — may be more than just a win-win for Gov. Phil Murphy and Democratic legislative leaders.
It appears to be a big win for New Jersey business leaders, too.
The deal — which, of course, is always subject to change until the budget is passed — is not expected to impact the sunsetting of the 2% Corporate Business Tax surcharge, administration officials told ROI-NJ on Monday.
“Our posture on the surcharge sunsetting has not changed,” the official said.
Murphy has been adamant that the surcharge — which pushed New Jersey to the nation’s highest CBT, at 11% — should sunset at the end of the year.
Others have argued that it should move from temporary to permanent to help pay for more programs such as StayNJ.
Administration officials said Monday that the agreement reached this weekend on a compromise version of StayNJ — one reached with Assembly Speaker Craig Coughlin (D-Woodbridge) and state Senate President Nick Scutari (D-Clark) — can work without keeping the surcharge because the new version comes at a smaller revenue requirement.
Here’s the framework of the compromise:
- Smaller cap: The new plan caps the annual credit at 50% of the property tax bill, up to $6,500 annually — previously, it had a cap of $10,000.
- Less eligibility: Those with an income of $500,000 or more will not be eligible — previously, there was no income eligibility threshold.
Murphy, who had threatened the shut down the government should a budget include the original StayNJ language, appears to have received other assurances — including a budget that includes commitments to fulfill pension payments and K-12 public school funding. Renters will also receive a tax credit under the plan.
The details of the new plan were first reported by the New Jersey Globe.
The totals can — and likely will — change. Under the new agreement, the $6,500 total is indexed against rising property taxes. In other words, if the average property tax bill increased by 2%, the allowable credit would increase by 2% (in this case, that means $6,500 would increase by $130, to $6,630).
StayNJ is not expected to take effect until January 2026, but the new deal calls for an immediate boost of $250 to seniors and renters as part of the ANCHOR property tax relief program.