New Jersey’s Democratic Party power triumvirate did their best last week to sell the importance — and certainty — of one of the grandest benefits ever promised to Trenton: a credit that could reduce up to 50% off senior property tax bills. .
The Big Three used more sales pitch superlatives than an over-caffeinated QVC host selling flashy watches at 2am.
“There’s a lot to be excited about in this program, and if you’re a senior, this is a great day for you,” said Assembly Speaker Craig Coughlin, D-Middlesex, the lead architect of StayNJ. what he doesn’t have yet. -Approve the tax relief proposal that has become the central point of this year’s budget negotiations.
However, as much as the trio tried to commit to a “spiritual” obligation to offer the program, they couldn’t offer any firm assurances that homeowners 65 and older—and with incomes of $500,000 or less— will ever see the promised cut, or a maximum credit of $6,500 on tax bills, starting in 2026.
Still, as the plan faces likely votes in both chambers of the Legislature this week, we’re sure to hear passionate speeches about how StayNJ will keep grandma and grandpa close to their loved ones in New Jersey , rather than risk his flight. to a low-tax development in the Carolinas.
So I thought it might be helpful to review some of the sales pitches of the triumvirate—Coughlin, Gov. Phil Murphy, and Senate President Nicholas Scutari—and provide some context for thinking about the program, including the less than enduring history of previous discounts. programs
Before:Murphy touts a “fiscally responsible” StayNJ budget deal. Here’s why
Can New Jersey afford this?
CLAIM: New Jersey will be able to afford the $1.3 billion price tag for StayNJ when it finally becomes available in 2026. Why? Because the economic picture now looks pretty good.
“And these days are better,” Scutari said. “Under the policies that have been put in place over the last six years, New Jersey has grown. So we can afford to offer this much-needed property tax relief.”
Sctuary is not the first New Jersey lawmaker to cite current economic strength to justify a windfall or windfall for the future.
In 2001, then-acting Gov. Donald T. DiFrancesco, a Union County Republican who succeeded Gov. Christie Whitman after he left office to run the federal Environmental Protection Agency, signed legislation that granted a 9% increase in the pensions of retirees and current ones. teachers and other public employees. DiFrancesco was planning a run for governor that year.
But this giveaway to powerful teacher and public employee unions was built on the premise of a strong stock market. And then the dot-com bubble burst, and signs of it were evident even as the Legislature enacted the increase, and the liability of the state pension fund began to expand.
“This legislation may have been politically popular, but it accelerated New Jersey’s financial deterioration,” wrote Gordon I. MacIness and Sheila Reynerston in a 2016 assessment of this legislation for the New Jersey Political Perspective.
Charlie Stiles:StayNJ survived with input from Phil Murphy. Will it ever be a reality? see me
Last week, Murphy also tried to convey confidence in StayNJ’s likelihood by affirming bullish forecasts from economic analysts and Wall Street sachems ahead of the program’s 2026 launch date.
That’s why, he said, “we want to give ourselves a couple more years to see that the economy will strengthen, and we have every reason to believe that it will.”
Will StayNJ really be a priority?
CLAIM: Lawmakers won’t back away from StayNJ if the economy turns sour. It is now a top priority, along with school funding and annual pension payments. And the program should live on even after Murphy leaves office in 2026.
“And I think that’s going to be called wildly popular, wildly popular,” Murphy stated. “And no matter what party you’re in, no matter what your persuasion, it’s going to be hard to turn your back.”
Historically, rebate programs have been popular since the granddaddy of them all, the Homestead Rebate, was enacted in 1976 to soften the blow of the first state income tax. He helped then-Gov. Brendan Byrne runs for re-election to return from the brink the following year.
But the sales are hardly sacrosanct. After pushing for rebates early in his term, Gov. Jon S. Corzine eliminated rebates for non-senior homeowners making more than $75,000 in 2009 as incomes plummeted in the wake of the Great Recession. And his successor, Gov. Chris Christie, further cut eligibility for the rebates for those making less than $75,000 as he tackled a $2.2 billion deficit from the Corzine years.
The political impact is hard to measure, but the cuts didn’t help Corzine, who fell in defeat to Christie in 2009. But the reduced eligibility didn’t seem to hurt Christie, who easily won a second term in 2013.
Charlie Stiles:As StayNJ approaches, some are asking: Where are the “smartest” property tax savings in NJ?
Expendable political capital
However, the larger lesson is that governors, when they feel the pinch, are not afraid to cut back on rebates and credits when forced into a fiscal pinch.
And despite Murphy’s assurances, bolstered by a positive outlook provided by former Treasury Secretary Robert Rubin at a recent meeting, a bipartisan group of respected New Jersey economists and officials warned last week that it is likely the state faces a revenue deficit that ranges from $12.5. billion to $18.5 billion from fiscal year 2025 to fiscal year 2028.
And the dismal projection did not include the $1.3 billion cost of StayNJ. That’s the kind of revenue drop that, to use a frequent Trenton phrase when officials are asked to detail cuts, will put “everything on the table.”
And if history is any guide, that would include StayNJ, even before it launches. Also, it will be much easier to disconnect from a discount that hasn’t arrived yet than one that people have become accustomed to receiving.
Charlie Stile is a veteran political columnist from New Jersey. For unlimited access to his unique insights into New Jersey’s political power structure and his powerful watchdog work, subscribe or activate your digital account today.
E-mail: stile@northjersey.com
Twitter: @politicalstyle
