While the State Senate is making progress on addressing bracket creep to lower state income taxes, Governor Murphy just announced his own tax-cutting proposal yesterday. The Gov. announced that his 2023 budget proposal would include the ANCHOR property tax program. This would provide relief to owners and renters.
Property taxes are a long-standing issue in NJ, and for good reason, they’re the highest in the entire country. Accordingly, for the fourth year in a row, NJ topped the nation in 2020 with the highest percentage of residents leaving in a United Van Lines study of clients utilizing their services.
The Murphy administration’s announcement that his 2023 budget plan will address this issue is good news for the state coffers. NJ must stop the hemorrhaging of its residents. With more established residents leaving while younger and lower-income individuals replace them.
While Gov. Murphy will release his full 2023 budget proposal next week, yesterday’s press release in Fair Lawn, NJ, actually said a good amount. Interested in watching that full briefing? I skipped past all the unrelated discussions at the beginning of the video to get right to the ANCHOR discussions.
With that, let me get into everything we know about ANCHOR.
“Affordable New Jersey Communities for Homeowners and Renters Property Tax Relief Program.” Yes, some liberties were taken with the acronym there. I suppose “anchor” rolled off the tongue better than “ANJCHR,” with the added symbolism to boot.
Governor Murphy claims over 1.8 million residents in the state will qualify for some of the funds available. This includes homeowners making less than $250,000 per year and renters earning less than $100,000 per year.
With many residents qualifying because of high-income caps and availability to both homeowners and renters, ANCHOR demands attention. Even if you don’t meet requirements, you know someone who does.
There are many programs that come and go at both state and federal levels. This is often because there are too few people that can and will benefit from a given program. One example of this was the Return and Earn program, which I thoroughly lambasted for being too specific.
Sometimes a program immediately reeks of patronizing platitudes; I’m happy to say this is not one of those times!
What Can I Get from the ANCHOR Property Tax Program?
Gov. Murphy said that homeowners would qualify for an average of $700 in rebates, while renters get up to $250. The exact mechanisms of how the ANCHOR property tax will work are not yet announced. There’s always a chance of changes by the legislature before going into effect.
You absolutely do pay property taxes, even if you’re not paying the state directly. Property taxes influence how landlords determining rents. Your monthly rent reflects what an owner owes to the state. It’s akin to businesses passing on increased labor costs to consumers.
Too often, renters are treated as though they’re not full residents of a community. Why? Because they’re not paying their taxes directly to the state; I stand against this position. Don’t get confused renters actually pay a good number of takes. Various payroll or self-employment taxes to the state, pay sales tax in their communities, and pay property taxes via their rent each month. There’s even an argument that renters pay a higher property tax, proportional to their homeowning neighbors.
Going back to what I discussed about the difference between programs that pay lip service to a problem and those that actually attempt to tackle an issue, ANCHOR is in the latter group. ANCHOR is taking a real swing at a real problem for NJ.
It would have been very convenient for Gov. Murphy to exclude renters from the ANCHOR property tax program. It would keep a huge portion of revenue in NJ, and still get the credentials as a tax-cutting governor who understands residents’ concerns. Instead, he did what I’ll call the right thing and included a far greater portion of the states’ population in the group of those who could see property tax relief in the fiscal year 2023.
When Will There Be More Information About the ANCHOR Property Tax Program?
March 8th, 2:00 EST, Gov. Murphy will give his budget address. If you want to watch that live, or see it afterwards, you should check out the Governor’s YouTube page.
To highlight why this issue is important, I’ll quote a long-term NJ resident, my 72-year-old father. Paraphrasing his statement, he said, “I paid off my mortgage 13 years early, and the only reward I get is the $900 a month I have to pay to the state as rent for still being alive. What’s the incentive to stay here?” Good question, Dad. I think the governor is trying to give you and many millions a better reason to stay than you’ve had.