REPORT: ANCHORs Aweigh: Explaining Governor Murphy’s New Property Tax Relief Program
For Immediate Release
April 4, 2022 – Governor Murphy’s new property tax relief proposal, ANCHOR (Affordable New Jersey Communities for Homeowners and Renters), would significantly expand property tax relief to homeowners and renters, but could be better targeted to low- and moderate-income households, according to a new report by New Jersey Policy Perspective (NJPP).
The report, ANCHORs Aweigh: Explaining Governor Murphy’s New Property Tax Relief Program, outlines the size and scope of the tax relief proposal, how it stacks up against the existing Homestead Benefit program, and highlights who benefits the most from it — and by how much.
“Everyone in New Jersey deserves a fair tax system,” said Peter Chen, NJPP Senior Policy Analyst and report author. “But property tax relief that disproportionately benefits wealthy households doesn’t do its job to advance equity in New Jersey. As lawmakers explore ways to make our state more affordable through property tax relief, we need to ask: Affordable for who?”
According to the report, ANCHOR would direct nearly $150 million to households earning over $150,000 per year, compared to about $100 million for all renters. The average yearly credit amount for homeowners would be $682 and the renter credit would be fixed at either $150 or $250, depending on eligibility. While renters do not pay property taxes directly, a substantial proportion of their rent goes toward their landlords’ property tax payments.
The report also notes that, as lawmakers prioritize making the state more affordable through property tax relief, white residents are much more likely to own their homes — and homeownership is tied heavily to overall wealth. White householders make up 74 percent of all owner-occupied units in the state, but only 39 percent of renter-occupied units.
“Benefits that go primarily to homeowners run the risk of disproportionately benefiting wealthier, white households,” said Chen in the report.
The report also provides five hypothetical scenarios to illustrate who would benefit from ANCHOR and recommends that the proposal be retooled so the credit directs more relief to low- and moderate-income homeowners and renters who need the most help.
“To help those who need it most, the ANCHOR program should direct fewer dollars to high-income homeowners, and more to renters,” said Chen in the report.
ANCHOR, the centerpiece of Governor Murphy’s Fiscal Year 2023 budget proposal, would expand the Homestead Benefit in three main ways: Increasing the credit amount for current recipients, extending the benefit to homeowners with higher incomes ($75,000-$250,000 annual income), and reopening the benefit to renters on a limited basis.
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New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.