NJ Could Up Property Tax Rebates With $10B Surplus: What We Know

NEW JERSEY - The often lamented, always criticized New Jersey property taxes remain the highest in the nation. But there is a chance that might change, due to an unexpected $10.1 billion surplus in the upcoming Garden State budget.

The fiscal outlook is a far cry from last budget season, when Governor Phil Murphy spent numerous COVID briefings painting a dire picture of slashed essential services and public safety shortfalls if fiscal help wasn't received to help New Jersey manage the economic downturn caused by the pandemic.

But while there was financial help that was received, to the tune of $6.2 billion of federal aid, there is an estimated $5.2 billion more flowing into the coffers from unanticipated tax revenue, and that could add up to tax relief.

"If we could find a way to plus up, for instance, the homestead rebate, count me all in for things like that," Murphy said this week at a COVID-19 briefing.

The Homeowners’ Homestead program Murphy mentioned gives credit based on 2006 property tax bills, which allows the state to hold down program costs despite homeowners’ rising bills. Currently, the proposed budget includes $260 million to fund that benefit program and $220 million for the Senior Freeze.

The proposed budget also has a provision for tax rebates of up to $500 for singles with income below $75,000 and at least one dependent child and married filers with income below $150,000 and at least one dependent child.

Currently, Murphy and the Democratic-lead legislature is negotiating options. While many on both sides of the aisle have spoken publicly in support of giving money back to taxpayers. Some are still cautious.

“This is a once in a lifetime opportunity. We need to fix things, and not create programs that you can’t support years later and have to add additional costs to,” he said in a virtual town hall. “The biggest concern I have is that instead of fixing things, people are going to see this money and say, ‘Oh now I can finally go build that park.’ But once you build that park, you have to pay to maintain it. How about if you fix the longstanding problems, like water infrastructure, for example.”

But he acknowledged they will be putting together a list of things that need to be done.

“If we do this in a smart way, think about what $6.5 billion into the economy, out of nowhere, can do for us,” Sweeney said.

It is safe to say that any relief will be helpful for Garden State residents. Data released this year from the state Department of Community Affairs notes property taxes rose 1 percent, from $8,953 to $9,112, between 2019 and 2020. It was lower than the 2 percent cap former Gov. Chris Christie put into effect in 2011, according to the analysis.

By contrast, between 2018 and 2019, the average homeowner's tax bill rose from $8,767 to $8,953, an increase of 2.12 percent.

The tax data tables also show that tax ratables rose 2 percent statewide since 2019, an increase above the five- and 10-year historical averages, with total ratables now at $1.118 trillion. The majority of municipalities in the state had average residential property tax decreases or increases under 2 percent. READ MORE: Every NJ Town's Average Property Tax Bill In New 2021 List

The final budget must be approved by July 1.

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