The New Jersey legislative leader championing a bill to halve most seniors’ property taxes says he’s open to compromises — signaling a potential opportunity to end a dispute with Gov. Phil Murphy that could shut down the state government on July 1.
“I think we have demonstrated that over the five previous budgets that we have worked on together and we’ve always gotten there, and I don’t have any reason to believe that we’re not going to get there on this one either,” said Assembly Speaker Craig Coughlin.
Coughlin’s “StayNJ” bill would cut property taxes for anyone 65 years or older by half, up to $10,000. There are no eligibility restrictions based on income — a critical objection for Murphy, who publicly rejected the proposal and instead championed initiatives including an existing property tax rebate and senior tax freeze programs.
“I don’t think we should be in the business of giving the likes of me tax breaks,” Murphy, a millionaire and former Wall Street executive, told reporters at an unrelated event on the Asbury Park boardwalk last month. Murphy’s office has since told WNYC that talks continue, and that it shares Coughlin’s goal of providing relief to seniors.
Coughlin has made the bill a priority by 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.
“There are too many people, senior citizens in particular, who leave New Jersey because of property taxes,” Coughlin said.
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. But an impasse over the senior tax program could jeopardize those negotiations. It’s an intra-party dispute; Murphy and Coughlin are both Democrats, and Democrats control both chambers of the Legislature.
The governor’s chief of staff, George Helmy, said negotiations with legislative leadership are going well.
“While we have serious challenges with the current version of the bill, we share the goal of streamlining the process and delivering even more tax relief to our seniors,” Helmy said in a written statement. “We look forward to working closely with the speaker to see this relief delivered in this budget.”
Coughlin has not said whether he is willing to require income eligibility restrictions for the tax cut.
“All of the benefits that come from having seniors [stay in their communities] are not tied to income,” he said. “Just because you are wealthy doesn’t mean you’re not providing childcare for your grandkids or participating as a volunteer at the local arts center or at the food pantry.”
The nonpartisan Office of Legislative Services has estimated the program would cost $1.2 billion yearly, though the governor’s office puts the estimate closer to $1.7 billion. Murphy’s own proposal for the annual budget for the coming fiscal year is $53.1 billion.
“I think the plan has the real opportunity to make a transformational difference for seniors in terms of their decision to stay here,” Coughlin said.
Coughlin proposes setting aside money for the tax cut with surplus funds from this year and dedicated funds in the two following fiscal years before the tax cut takes effect in January 2025. Those funds would be used to lessen the impact on state budgets through 2028.
“We are in the best financial situation we’ve been in probably ever, certainly in the 14 years that I’ve been in the Legislature,” Coughlin said. “And that’s a credit to good fiscal stewardship.”
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 the state’s largest city and a handful of affluent suburbs.
David Crutcher, 76, of South Orange, is planning to sell his house next year and move to the Dominican Republic. His annual property tax bill of more than $18,000 is a major contributor to that decision.
“There are so many attractions to the town, it’s really a difficult decision, I think, for most people to move,” Crutcher said. Yet he’s known many neighbors who have left town in search of a place with lower property taxes after their kids were no longer in the local schools. “So I think by helping them, it certainly would have a positive impact on people being able to stay.”
The State Assembly Committee on Aging and Senior Services advanced the bill last week, but most members said they want to see fixes before the final version comes to the whole Assembly.
“I think this is an extremely well intentioned bill. I have a lot of concerns about it – the lack of an income cap and the exclusion of renters,” said Assemblywoman Mila Jasey, a committee member who represents a large part of suburban Essex County. “I know this is a package of bills that is very important to the speaker, so I will vote to move them out of committee, but I think there’s a lot, a lot of work that needs to be done.”
Assemblywoman Sadaf Jaffer (D-Princeton) is stepping down when her first term concludes after this year. That gives her more freedom to oppose the legislative leadership. She’s not on the committee, but attended the public hearing to speak against the bill.
“I would certainly hope that if this moves forwards, it will be changed,” Sadaf Jaffer said. “Millionaires and billionaires would benefit from state funds at a rate of up to $10,000 every year and lower-income seniors living in less valuable properties would receive proportionately less, and seniors who rent their homes would receive nothing.”
New Jersey Policy Perspective, a progressive think tank that opposes tax policies that benefit those with higher incomes, also opposes the senior tax cut.
“It’s fair to design a system that continues to assist people at different income levels, but the bulk of the benefits should not be going to people at the higher end of the income spectrum,” said Peter Chen, a policy analyst at New Jersey Policy Perspective.
The proposed bill benefits seniors with more expensive homes and does little for those who live in poverty or rent. But neither side of the debate has produced numbers about how many people are in the middle — seniors who made enough in their careers to afford valuable homes, but who struggle in retirement to afford the highest property taxes in the nation.
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