New Jersey Democrats propose tax breaks; Republicans say proposal offers no significant relief
(The Center Square) – New Jersey Democrats unveiled a fiscal 2022 budget agreement on Monday, one they say provides middle-class tax rebates and property tax relief.
However, Republicans say the agreement doesn’t provide substantive tax relief and fails to recognize the state’s precarious financial standing.
The announced agreement includes $319 million for $500 tax rebates for more than 760,000 New Jersey families, which proponents say are possible because of the state’s previously enacted “Millionaires Tax.”
The agreement also includes updating the base year of the Homestead Benefit to 2017 property tax information, at a cost of $80 million, and it would expand the Veterans Property Tax Deduction to include peacetime veterans, which would cost $15 million. Additionally, it would expand the Child and Dependent Care Credit (CDCC) to families making up to $150,000, at a cost of $17 million, and it lowers the age of eligibility for the Earned Income Tax Credit (EITC) to 18 years old and extends it to anyone 65 years and older without dependents, a cost of $13 million.
“This is direct tax relief to middle income families and senior citizens who need it most,” Senate President Steve Sweeney, D-Gloucester/Salem/Cumberland, said in a news release. “The income tax rebate will put money into the pockets of working families so they can support themselves and their children.
“The increased Homestead rebates will help ease the heavy property tax burden on middle-income homeowners,” Sweeney added. “This extra assistance is especially important for senior citizens on fixed incomes so they can continue to live in their home communities. These benefits will be spent in the local economy, generating jobs and business activity in communities across the state.”
Sweeney joined Gov. Phil Murphy; Assembly Speaker Craig Coughlin, D-Middlesex; Senate Budget Chair Paul Sarlo, D-Bergen; and Assembly Budget Chair Eliana Pintor Marin, D-Essex, to announce the agreement. The governor previously unveiled a more than $44.8 billion spending plan for fiscal 2022.
However, Republicans say the accord doesn’t help fix longer-term problems with the state’s finances.
“Despite the State receiving a $5 billion tax windfall in recent weeks, Democrats are proposing no significant new tax relief for New Jerseyans,” Senate Republican Budget Officer Steven Oroho, R-Sussex, said in a statement.
“That stands in stark contrast to our Republican plan to significantly boost tax relief and fix long-standing structural budget issues,” Oroho added. “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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