The proposal comes as the average property tax in New Jersey has surpassed $10,000 for the second consecutive year, reports local outlet NJ.com reported.
If the proposal is adopted in the final spending plan — due July 1 — the income ceiling for Stay NJ eligibility would be lowered to $250,000, down from the current cap of $500,000.
The maximum combined benefit from Stay NJ and other property tax relief programs would also reportedly shrink from $6,500 to $4,000.
Sherrill defended the proposal while emphasizing a shift toward renters.
“Stay NJ is a great program, but (the adjustments) will focus on providing more relief for low- and middle-income seniors,” she said. “That is a fairer and more efficient use of taxpayer money.”
Advocates for seniors warned that the cuts could have significant consequences.
“(Proposed cuts) are the difference between staying at home or being forced to move,” said Chris Widelo, state director of AARP New Jersey. “It is critical that the program does not reduce annual benefits and continues to provide meaningful relief while delivering on its promise to the people who rely on it.”
The limit applies to total benefits received through Stay NJ, the ANCHOR program and the Senior Freeze program. Even with the combined benefits, homeowners couldn’t get relief on more than 50% of their property tax bill.
For some homeowners, the change would translate into noticeable losses, according to NJ.com.
A senior homeowner who pays $15,000 annually in property taxes would lose $2,500 in savings, if eligible under the new rules.
Someone with a $9,000 tax bill would see their exemption drop by $500. Homeowners making more than $250,000 annually would lose the benefit entirely if they received the maximum amount.
Despite the proposed reductions, the Treasury Department estimates that approximately 90% of the approximately 438,000 homeowners currently eligible for Stay NJ would still qualify for some level of benefits.
The proposal also includes changes to the state’s $2.3 billion ANCHOR program. The base payments would remain unchanged: $1,500 for homeowners earning up to $150,000 and $1,000 for homeowners earning up to $250,000. Renters would continue to receive $450.
But senior homeowners would lose the program’s $250 bonus payment, while senior renters would keep the extra benefit. The bonus was expected to expire in the coming fiscal year, NJ.com added.
The $350 million Senior Freeze program, which reimburses eligible seniors and people with disabilities for property tax increases, would reportedly remain unchanged.
Even with the cuts to Stay NJ, the three programs together would cost the state a record $4.2 billion, NJ.com reported.
