Democratic legislative leaders and Gov. Phil Murphy announced an agreement Monday that would provide hundreds of millions of dollars in tax relief in the spending plan for the fiscal year beginning July 1.
The proposal includes providing a $500 tax rebate to 760,000 middle-class families from the millionaires tax the state enacted last year. Also, more money from the homestead rebate, as the state will use updated property-tax records to calculate the payments. The child and dependent care tax credits are also expanding so that more families are eligible. The proposal also expands the Earned Income Tax Credit eligibility age to include those 65 and older and as young as 18 years old.
Republicans have said the tax relief by the Democrats is not significant and their own proposals would do more for taxpayers.
It has been the most unusual year for budgeting. Months ago the state feared a revenue shortfall and borrowed billions, only to see a surge in tax revenue and new federal COVID-19 relief funds, giving New Jersey a projected $10 billion surplus heading into the new fiscal year. Lawmakers have about a week to send Murphy a new spending bill.