State lawmakers advanced several bills related to property taxes yesterday, but conspicuously missing from their agenda was the new tax credit that Gov. Phil Murphy wants to see passed by the end of the month along with a millionaires tax.
In fact, in the week that has passed since Murphy put forward his $250 million property-tax relief proposal — which would give a $125 tax credit to up to 2 million New Jersey homeowners and renters — no lawmaker from either house has come forward to sponsor it.
While much can still happen between now and June 30, the date the next state budget is due to be enacted, the lack of action on the Murphy property-tax relief proposal — and the millionaires tax that would fund it — suggests no one should be rushing out to spend a possible $125 tax credit just yet.
Murphy, a Democrat, is not yet conceding defeat, and public-worker unions and other activists are maintaining a full-court press to support his proposal for a millionaires tax.
The Department of Treasury also recently provided NJ Spotlight with new data that suggest — thanks to the tax-policy changes President Donald Trump signed into law in 2017 — New Jersey millionaires still would come out ahead even if they were subject to a higher tax rate at the state level.
“As the Governor has said, this is about tax fairness — asking the most fortunate in our state to shoulder their fair share to help the beleaguered working and middle class,” Murphy spokesman Matthew Saidel said yesterday.
Among the bills that advanced in the State House yesterday was legislation that would require the property-tax bills that New Jersey homeowners receive on a quarterly basis should include information about the state’s numerous property-tax relief programs, such as Homestead and Senior Freeze. That bill passed the Assembly in a 71-0 vote.
“This legislation will help people understand what tax-relief programs are available by making the information more accessible by simply including it on existing forms, which will be of no additional cost to municipalities and will ultimately save time, stress, and money for our residents,” said Assemblyman Jamel Holley (D-Union).
In the Senate, legislation was passed with a 37-0 margin that would allow local officials to add information to property-tax bills reflecting any savings for taxpayers that have been realized through shared-services initiatives. The change is intended to promote the savings that many local officials are getting from pooling their resources with neighbors.
“We know this is a great way to reduce redundancy and lower property taxes, without sacrificing quality public services,” said Sen. Anthony Bucco (R-Morris). “We should shine a light on communities that are making an effort to save taxpayers money.”
Both bills are expected to make it to Murphy’s desk by the end of the month. That’s also when the governor is hoping to see a bill establishing both the millionaires tax and the proposed $125 tax credit which would go to an estimated 2 million homeowners and renters making up to $250,000 annually when they file their income tax next year.
No partner for the governor
Murphy’s administration confirmed yesterday that a draft of that bill has been shared with lawmakers. But right now, no one from either party has stepped forward to sponsor it.
The top leaders in both houses, which are controlled by the governor’s fellow Democrats, have already announced their opposition to the millionaires tax, which would extend the top-end rate of 10.75 percent — currently levied on all earnings over $5 million — to all earnings over $1 million. The lack of widespread support for the measure in the Legislature is crucial because the state constitution requires all bills that raise revenue to begin in the Assembly. The millionaires tax would raise an estimated $536 million in fiscal year 2020, according to Treasury.
Lawmakers are on course to adopt a budget bill on June 20, but last week several who were considered to be possible votes in favor of the proposed wealth surcharge issued statements saying they are instead prepared to vote for a bill that doesn’t include it. The governor’s sweetening of the pot by proposing the $125 tax credit has also not appeared to generate more interest among lawmakers.
The tax data provided to NJ Spotlight by Treasury seeks to undermine their misgivings by demonstrating that New Jersey’s nearly 20,000 millionaires would end up doing just fine even if they faced the higher state tax rate. That’s because they’ve been enjoying benefits from the tax cuts enacted in 2017 by Trump — including a top-end tax rate that dropped by nearly three percentage points. The net savings for millionaires from the Trump tax cuts range from nearly $30,000 at the low end to over $150,000 for those making more than $10 million, according to Treasury’s analysis.
Groups advocate for millionaires tax
Meanwhile, a letter to state lawmakers that was signed by dozens of organizations supportive of the millionaires tax, including New Jersey Working Families and the League of Women Voters, was unveiled yesterday during a news conference in Trenton. It cited favorable poll numbers for the millionaires tax and past support among legislative Democrats as reasons to move it forward this year.
“We urge you all to stay true to your promise and support Governor Murphy’s tax-fairness proposal that is not only necessary but also supported by New Jerseyans,” the letter said.
A rally organized by the Communications Workers of America in support of the millionaires tax is scheduled for Thursday at the State House.
Thanks to an improving state revenue outlook, a millionaires tax may not be needed to keep the FY2020 budget balanced, at least in the eyes of lawmakers.
Talking to reporters separately at the State House yesterday, Assembly Speaker Craig Coughlin (D-Middlesex) and Senate President Steve Sweeney (D-Gloucester) both reiterated their longstanding opposition to the governor’s proposed millionaires tax.
“I have been pretty crystal clear on the notion that it is not a time to have a millionaires tax,” Coughlin said.
“The votes aren’t (there) … that’s why we’re not putting it up,” Sweeney said.