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Coughlin Pledges Full Restoration of Homestead Property-Tax Relief

Assembly Speaker’s declaration sets up possible showdown with governor, who has signaled support but no firm commitment to reinstate previous level of funding

Craig Coughlin
Assembly Speaker Craig Coughlin

Assembly Speaker Craig Coughlin has put a strong marker down in the wake of a budget snafu that’s left funding for the state’s popular Homestead property-tax relief program cut in half, promising the Assembly is committed to fully restoring Homestead relief in the next state budget.

“The Assembly will pass a budget that provides a full year’s property tax credit to help ease the burden on seniors and working families,” Coughlin said in a statement provided to NJ Spotlight yesterday.

The pledge from Coughlin (D-Middlesex) is perhaps the firmest commitment yet by a top leader in Trenton to address a problem that was created by a messy budget battle between lawmakers and former Gov. Chris Christie that played out last summer. The budgeting misstep has forced hundreds of thousands of New Jersey homeowners, primarily seniors, the disabled and low-income residents, to pay higher than expected property-tax bills this spring.

Coughlin’s declaration also sets up a possible showdown over property-tax relief with Gov. Phil Murphy, whose budget proposal for the 2019 fiscal year has requested the same, $143.5 million appropriation for Homestead that was in the budget for the current fiscal year. Earlier this week, Murphy said he is “open-minded” about adding more Homestead funding, but he has not yet made a firm commitment to do so.

Republicans criticize governor for labor deal

Meanwhile, the governor is facing criticism from some Republican lawmakers in the wake of signing a new deal with the Communications Workers of America labor union that will cover two separate 2 percent raises. After initially being unable to say how much the agreement would cost taxpayers, Murphy’s administration disclosed yesterday that the total is $148.9 million. But that sum includes $78 million in retroactive “step” payments to workers that were suspended by Christie on questionable grounds. Still, it will also cost another nearly $50 million in fiscal 2019, and GOP lawmakers are suggesting the funding for the labor deal could be used instead to beef up the Homestead program.

“Governor Murphy is demonstrating how little he cares for New Jersey taxpayers,” said Sen. Michael Doherty (R-Warren).

In all, more than 600,000 New Jersey homeowners benefit each year from the Homestead program, which provides property-tax relief credits and rebates to help take some of the sting out of the state’s notoriously high property tax bills, which now average $8,690. Up until this year, Homestead credits, which are provided as a direct credit on property-tax bills, had averaged $515 for senior citizens and disabled homeowners making up to $150,000 annually, and $401 for middle- and low-income homeowners making up to $75,000 annually.

But last year’s budget battle between lawmakers and Christie, which included a state-government shutdown over the July 4 holiday, resulted in a $292 million Homestead appropriation that Christie initially requested for fiscal 2018 being nearly cut in half as lawmakers worked to free up more state dollars for public education. The reduced Homestead funding, which went largely unnoticed following the resolution of last year’s budget impasse, resulted in this year’s Homestead credits averaging an estimated $259 for senior citizens and disabled homeowners, and $202 for other homeowners making up to $75,000.

Frustration is building

Frustration with the slashed credit has been building in recent weeks as homeowners across the state have been receiving their quarterly property-tax bills. Coughlin, who was not the leader of the Assembly last year, responded on social media earlier this week, saying in a post that, “On my watch, the General Assembly will pass a budget that restores the homestead rebate to ease the tax burden on seniors and middle-class families. Asked by NJ Spotlight to clarify whether that means Coughlin is calling for more funding for Homestead credits in fiscal 2019, a spokesman for the speaker said the intention is to provide double the $143.5 million that Murphy has requested in his own budget to restore the credits to their prior levels.

“We’ve been hearing from concerned residents across the state, and, quite simply, taxpayers deserve better,” Coughlin said in the statement.

With only weeks left before the June 30 deadline for a new budget, the speaker’s firm position on Homestead puts him somewhat at odds with Murphy, especially as Senate Budget and Appropriations Committee Chair Paul Sarlo (D-Bergen) has also signaled a willingness to restore the full credits.

A first-term Democrat who just recently celebrated his first 100 days in office, Murphy’s fiscal 2019 budget, which calls for a series of tax hikes, would boost property-tax relief primarily by increasing state aid for K-12 schools districts by nearly $284 million, and raising the state income-tax write-off for property taxes from $10,000 to $15,000.

Murphy: ‘…other big priorities’

Pressed on the issue of Homestead funding in a recent interview with NorthJersey.com, the governor said “if we can find some way to juice that, we will.” But he didn’t make a clear commitment to fully fund the credits that have been paid out prior to this year, and when asked earlier this week about his plans for Homestead, Murphy gave reporters a similar response.

“I’d like it to be better, but we can’t turn this thing around overnight, there are other big priorities for us,” Murphy said.

Also left unclear is whether Murphy’s administration intentionally drafted a budget proposal with the same reduced funding for the Homestead program as emerged after last year’s budget dispute, or if he did so mistakenly, as some lawmakers have suggested. Asked by a reporter about that specific issue earlier this week, Murphy largely sidestepped the question.

“I know what I inherited, which was a fiscal mess, and this is a priority, along with some other mouths to feed,” he said.

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