New Analysis: How StayNJ is Even More Regressive Than at First Glance
New Analysis: How StayNJ is Even More Regressive Than at First Glance
For Immediate Release
June 24, 2024 – With the state budget deadline looming and property tax credits a major sticking point in negotiations, a new analysis by New Jersey Policy Perspective (NJPP) reveals a major and overlooked flaw in the new StayNJ program for senior homeowners.
The analysis, How StayNJ Is Even More Regressive Than at First Glance, details how StayNJ interacts with New Jersey’s two other property tax credits, ANCHOR and the Senior Freeze, resulting in larger payments going to the highest income senior households.
Under the new program, the combined benefits of StayNJ, ANCHOR, and the Senior Freeze cannot exceed half of one’s property tax bill, up to $6,500.
Because the income eligibility for StayNJ ($500,000) is much higher than that of ANCHOR ($250,000) and the Senior Freeze ($150,000), the combined cap results in low- and middle-income households having their ANCHOR and Senior Freeze benefits subtracted from their StayNJ tax credit. Meanwhile, households with incomes over $250,000 will receive the full StayNJ benefit.
“This program was already designed to favor wealthy homeowners, but the way StayNJ interacts with other property tax credits makes it even more regressive,” said Peter Chen, Senior Policy Analyst at New Jersey Policy Perspective (NJPP) and author of the analysis. “The big winners here are households earning more than $250,000 who make too much to qualify for other programs like the Senior Freeze. When it comes to making the state more affordable, we should be targeting relief to families struggling the most. This does the opposite.”
Using hypothetical households — the Trentons, the Hamiltons, and the Princetons — to illustrate how StayNJ interacts with other programs, the analysis shows how two households with the same property tax bill would receive vastly different StayNJ tax credits depending on their household income.
In this scenario, the Princetons would receive more from StayNJ than the Hamiltons despite having nearly double the household income. The Princetons would also receive a StayNJ tax credit more than eight times the amount of the Trentons despite having ten-times their income.
The analysis also outlines three additional ways StayNJ favors high-income households: the high income cap of $500,000 to qualify for benefits; the exclusion of renters, who typically have lower incomes and less wealth; and tying tax credits to property taxes paid, which results in higher benefits for more expensive homes.
