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Senate President Steve Sweeney, left, Assembly Speaker Craig Coughlin, center, and Gov. Phil Murphy

Murphy, legislative leaders announce budget deal

Homestead getting a boost, other details scant

By Nikita Biryukov, June 21 2021 11:22 am

This story was updated with comment from State Sen. Steve Oroho at 2:48 p.m.

Gov. Phil Murphy, Democratic legislative leaders and budget chairs from both chambers announced a budget deal Monday morning, setting them up to pass a full appropriations bill later this week.

Details about the deal are still thin — it’s not even clear what the budget’s total price tag is — but the lawmakers offered a bare glimpse of some portions of the appropriations bill in a release Monday morning.

The program will update the Homestead Benefit Program to calculate rebates based on 2017 property tax valuations, instead of ones from 2006. The change will cost close to $80 million, the Democratic leaders said, and is expected to boost average benefits of between $130 for seniors and homeowners with disabilities and $145 for those in low-income brackets.

“With each budget I have introduced, we have provided greater relief to those who need it most — through our continued expansion of the Earned Income Tax Credit, the establishment and expansion of a Child and Dependent Tax Care Credit, increased tax relief for veterans, middle-class tax rebates, and now the long-overdue expansion of the Homestead Benefit to make sure relief reflects reality.”

A $319 million provision reached as part of a deal to enact a millionaire’s tax made last year will see more than 760,000 households receive tax rebates of up to $500.

They’re also planning to expand eligibility for the earned income tax credit by dropping the minimum age to 18, from 21, and removing the maximum age, allowing those over 65 to qualify.

The eligibility changes are expected to bring the tax credit to another 90,000 residents and carries a price tag of $13 million.

A boost to access for the Child and Dependent Care Credit will see families with a household income of less than $150,000 become eligible. That’s expected to bring the benefit to another 80,000 households. It’ll cost about $17 million, the lawmakers said.

“With these measures we’re building on the promise to make New Jersey more affordable and stand up for its working families and seniors,” Speaker Craig Coughlin (D-Woodbridge) said. “I am thankful for the Governor and Senate President’s partnership in ensuring the responsible expansion and strengthening of our state’s commitments toward middle-class tax relief. Through the promise of greater financial security, together these measures will generate more opportunities for residents and our economy to thrive.”

Much about the budget is still uncertain, including the total size of the appropriation bill. Gov. Phil Murphy in February proposed a $44.8 billion budget, though better-than-expected revenue collections and voluminous federal aid have seen the state’s reserves swell well past what was expected.

The new monies meant a $10 billion windfall, and it’s still unclear how lawmakers plan to use those funds.

Legislative leaders and Murphy’s office have discussed using the money to increase this year’s pension payment past the $6.4 billion proposed, release additional small business grants and bump state aid to schools.

It’s not clear whether any of that is still happening.

“This is direct tax relief to middle income families and senior citizens who need it most,” said Senate President Steve Sweeney (D-West Deptford) said. “The income tax rebate will put money into the pockets of working families so they can support themselves and their children.”

The announcement was met with little enthusiasm from Republican members, who said the announcement did not do enough to defray costs facing New Jersey taxpayers.

“Despite the State receiving a $5 billion tax windfall in recent weeks, Democrats are proposing no significant new tax relief for New Jerseyans,” State Sen. Steve Oroho (R-Franklin) said. “That stands in stark contrast to our Republican plan to significantly boost tax relief and fix long-standing structural budget issues. It’s likely we’ll see a spending spree of epic proportions for legislative add-ons when the final details of the budget are released.”

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