Gov./Legislative Leaders Agree on NJ Stay Senior Tax Cut Plan
Governor Murphy and Democratic legislative leaders have agreed to the framework on a deal to fund Assembly Speaker Craig Coughlin’s Stay NJ senior citizen property tax relief plan. This compromise creates a clear path for the legislature to pass a budget before the end of the month.
Under an agreement worked out between Murphy, Coughlin, and Senate President Nicholas Scutari have agreed to a tax credit for New Jerseyans over age 65 of 50% of property taxes capped at $6,500 annually – different than the $10,000 cap initially proposed – and will not apply to families with an income over $500,000. Renters will also receive a tax credit under the structure.
Specific language for the bill is still being worked out, but that is expected to include commitments to fulfill pension payments and K-12 public school funding.
While StayNJ is expected to take effect in January 2026, the agreement calls for an immediate boost to property tax relief under the current Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) program that will increase property tax relief by $250 for seniors and renters.
The $6,500 cap will be indexed based on property tax increases rather than creating a flat maximum number.
Time to Address the Transportation Trust Fund (again)
There could be major issues ahead for the state’s source of money to fix roads and bridges and support public transportation projects.
New Jersey’s Transportation Trust Fund (TTF) — which is funded through a gas tax, like many similar funds in states across the country — may start to feel the effects of missing out on revenue with more cars on the road that have better gas mileage or pay no gas tax because they are battery-powered.
And some say gas taxes alone are not sufficient to keep the fund solvent in the long term, because it requires more money to pay off old debt and take on new debt for a growing list of projects.
The Transportation Trust Fund's borrowing power expires in 2024. Despite this, the state Legislature and the governor have yet to address the looming issue.
Meanwhile, other states have begun adopting new programs to shore up their road repair accounts, creating user-based fees and electric vehicle surcharges to generate more revenue and ensure that EVs are paying for their use of the roads.
Summer Senate Sessions Possible
Senate President Nick Scutari (D-Linden) announced that while the regularly scheduled spring legislative session ends next Friday (June 30th), he may call the Senate back over the summer for the purpose of confirming judges.
Eight new Superior Court judges were confirmed by the Senate last week, but there remain 60 vacancies in the Superior Court system, a problem that has plagued the judiciary for several years.
Last summer, Scutari similarly called a special session over the summer, though only four new Superior Court judges were ultimately confirmed at that August meeting. Right now, there are 22 Superior Court candidates who have been nominated but not confirmed, though Governor Phil Murphy could always nominate more people in the coming weeks.
In addition to the many Superior Court vacancies, there’s also a pending nomination to the Supreme Court that the Senate has yet to take up. Scutari said he was hopeful that Supreme Court nominee Michael Noriega – who already has the votes necessary for confirmation – will come before the Senate soon, but he indicated that the busyness of the Senate’s schedule could mean that his confirmation hearing is pushed back into July.
State Revenues Continue to Drop
May tax revenues fell nearly 20%, according to the Treasury Department, a bigger drop than the administration had anticipated.
Overall tax collections are down nearly $1.1 billion this fiscal year, or 2.6% below the same period last year, according to Treasury. The agency said it expects revenue "to remain soft through the remainder of the fiscal year," which ends June 30.
According to Treasury, the state's major taxes in May totaled $2.64 billion, falling $641.8 million, or 19.6% from last May. Gross income tax was down nearly $570 million, or 55% from last May, largely due to an increase in refunds.
The Corporation Business Tax — which includes a soon-to-expire surcharge that may also become a sticking point in budget talks — decreased $135 million, or 45% from last year. Year-to-date collections are down 5.7 percent, according to Treasury.
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