Pennacchio Says Court Ruling Against Murphy Confirms NJ Must Lower Property Taxes

Federal Judge Appointed by Obama Throws Out Frivolous SALT Lawsuit

Senator Joe Pennacchio reiterated his criticism of Governor Phil Murphy’s lawsuit against the Internal Revenue Service after it was tossed by a federal judge on Monday, saying it’s time for the Governor to focus on lowering property taxes.

“Governor Murphy can join the Legislature in working to lower New Jersey property taxes, but instead he continues to waste his time, State government resources, and our tax dollars to play politics,” said Pennacchio (R-26). “Hopefully now he’ll finally realize that the solution to our state’s fiscal woes and sky high taxes isn’t suing the federal government. I urge the Governor to come to the table and have a difficult but necessary conversation on bipartisan legislative solutions that will truly make the Garden State more affordable for everyone.”

After the $10,000 limit on the federal income tax deduction for state and local taxes (SALT) was imposed nationwide in 2018 as part of broad federal tax reforms, the governor attempted to create a charitable deduction scheme aimed to allow New Jersey taxpayers to skirt the new limit. The IRS denied New Jersey’s attempts to circumvent the federal cap, prompting the lawsuit by Governor Murphy.

In September 2019, Judge J. Paul Oetken, appointed by President Obama in 2011, threw out the Governor’s lawsuit against the Internal Revenue Service. He stated the SALT cap was not unconstitutional.

While Senator Pennacchio was an outspoken critic of the elimination of the SALT cap, he believes that implementing fiscal reforms on the state level is the best way to provide real property tax relief.

“New Jersey had the highest property taxes in the nation before the SALT cap was imposed,” Pennacchio added. “Even the ruling judge, appointed by Obama, said that nothing is stopping states like New Jersey from working to lower our taxes if we don’t like the impact of the SALT cap. Governor Murphy, you are not above the Constitution. Stop pointing fingers, and get to work on alleviating New Jersey’s unreasonably high tax burden.”