Every senior in New Jersey deserves to grow old in their own home, with the stability and dignity that comes with it. And when the state spends public dollars to make that possible, those dollars should reach the people who need help the most, not the households that need it least.
Stay NJ, the state’s newest property tax rebate program, was not built that way. As designed, it sends some of its largest benefits to wealthy homeowners, offers nothing to senior renters, and carries a price tag headed toward $1.2 billion a year with no dedicated way to pay for it.
Gov. Mikie Sherrill’s budget proposal would begin to correct that. Her plan:
- lowers the program’s income limit to $250,000 from $500,000
- lowers the maximum benefit from $6,500 to $4,000
These changes reduce the cost of the program by more than $550 million, while continuing to provide benefits to most recipients. NJPP has previously proposed reducing the income limit and benefit amounts to control the cost of the program.
But these tweaks are a band-aid, not a full fix for what ails Stay NJ.
How Stay NJ works now, and why that’s a problem
Stay NJ is not a property tax cut. It is a check the state writes to certain homeowners aged 65 and older, worth up to half their property tax bill, up to a maximum of $6,500 a year. Under current rules, a household earning as much as $500,000 a year can qualify.
That design leads to outcomes that are hard to defend. Consider two seniors. A homeowner earning $450,000 with a $15,000 tax bill would get a larger state check than a senior with $20,000 in income and a $7,000 tax bill. Yet property taxes eat up far more of the second senior’s budget, making them far more likely to lose their home. A senior renter would get nothing at all from the program, regardless of income.
With high benefit amounts and a high income cap, the numbers add up fast. Left unchanged, Stay NJ would cost about $1.2 billion a year. That is roughly double what New Jersey spends on its Earned Income Tax Credit. The state EITC provides economic security for hundreds of thousands of working-class families.
What the governor’s proposal would do
Gov. Sherrill’s plan makes two changes:
- Lower the income limit from $500,000 to $250,000. This stops the state from sending subsidies to its highest-income households.
- Reduce the maximum benefit from $6,500 to $4,000.
Together, these changes would save the state more than $550 million and shrink the pool of recipients slightly – roughly 37,000 out of 480,000 total claimants, all earning over $250,000 per household.
Capping the income limit at $250,000 draws a sensible line. Fewer than 12 percent of New Jersey seniors have a household income over $200,000. NJPP has previously proposed a $150,000 cap, which would still cover 80 percent of seniors. There is little reason for the state to send a relief check to households earning a quarter-million dollars a year while families with far less go without.
Reducing the maximum benefit also helps target the aid to where it is most needed. Most recipients of Stay NJ receive far less than the $6,500 cap.
Instead of providing more benefits to low-income residents who are most in need of housing assistance, Stay NJ as currently written provides the highest average benefits to the highest-income recipients. Only households with incomes over $200,000 have average Stay NJ benefits above $4,000. This creates an upside-down system, where the highest income bracket gets more than twice as much in average benefits as households with less than $50,000 in income.
Beyond the distribution of Stay NJ benefits towards the wealthy, the $6,500 benefit cap is quite high for a government subsidy program, especially when compared to programs directly assisting people with low incomes.
For comparison:
- $6,552 is the maximum Supplemental Nutrition Assistance Program (SNAP) benefit for a 2-person household
- $6,708 is the maximum benefit for a 3-person family on Temporary Assistance for Needy Families
- $6,436 is double the maximum benefit for a family receiving the state Earned Income Tax Credit
Why this is the right call now
New Jersey faces a structural budget gap and a shrinking surplus, even as the latest revenue projections have come in stronger. Even with additional projected revenues, the state’s cash reserves would be roughly 9.8 percent, far below the 12 percent required by Stay NJ’s original legislation before benefits could go out. Meanwhile, schools across the state are facing layoffs and cuts, while public employee health benefits costs are projected to rise by double digits in the next year.
In that environment, spending nearly half a billion dollars to subsidize the state’s wealthiest seniors is hard to justify, especially when that money could do more good elsewhere.
The governor’s plan doesn’t fix what’s broken
Supporting these changes does not mean Stay NJ’s flaws are removed – just mitigated.
The deeper problems remain. Stay NJ still excludes senior renters completely, even though they face far higher rates of housing insecurity than homeowners. Roughly one in four New Jersey seniors rent, including more than half of Black and Hispanic/Latinx seniors, and they would get nothing from Stay NJ. Nationally, the poverty rate for senior renters is twice that of senior homeowners. The people most at risk of losing their housing are the ones the program leaves out.
And even after the governor’s changes, the program would still tilt toward wealthier households, because benefits are tied to property tax bills, which rise with home values. A reform that truly matched relief to need would lower the income limit further and extend help to renters. NJPP has recommended exactly that: The state should align the income cap with the ANCHOR program’s threshold and double the senior renter benefit, which remains at just $250. These changes would steer relief to the seniors most likely to lose their homes.
A more fruitful alternative to the complex web of property tax credit programs might be a straightforward “circuit-breaker” program that directly ties property tax relief to income level, ensuring that those with the greatest need are the ones who receive the benefit.
The Bottom Line
The governor’s proposal is a reasonable reform. It lets nearly every current recipient keep a benefit, saves the state hundreds of millions of dollars, and stops sending public money to households that don’t need it. Lawmakers should pass it, then keep going. New Jersey’s property tax relief should reach the homeowners and renters who need it most. Adopting these changes is a good start. Finishing the job means a property tax credit program that keeps residents housed and secure, without subsidizing the already-wealthy.
