The proposal comes as the average property tax bill in New Jersey has exceeded $10,000 for the second consecutive year, local outlet NJ.com reported.
If adopted in the final spending plan — due July 1 — the proposal would lower the income cap for Stay NJ eligibility to $250,000, down from the current $500,000 limit.
The maximum combined benefit from Stay NJ and other property tax relief programs would reportedly also shrink to $4,000 from $6,500.
Sherrill defended the proposal while emphasizing a shift toward renters.
“Stay NJ is a great program, but (the adjustments) will target more relief to low- and middle-income senior renters,” she said. “That’s a fairer, more efficient use of taxpayer money.”
Advocates for seniors warned the reductions could have significant consequences.
“(Proposed cuts) are the difference between staying in their homes or being forced to move,” said Chris Widelo, state director of AARP New Jersey. “ It’s critical that the program does not reduce the annual benefit and continues to provide meaningful relief while keeping the promise made to the people counting on it.”
The cap applies to total benefits received through Stay NJ, the ANCHOR program and the Senior Freeze program. Even with the combined benefits, homeowners could not receive relief exceeding 50% of their property tax bill.
For some homeowners, the change would translate into noticeable losses, according to NJ.com.
A senior homeowner paying $15,000 in annual property taxes, if eligible under the new rules, would lose $2,500 in savings.
Someone with a $9,000 tax bill would see relief drop by $500. Homeowners earning more than $250,000 annually would lose the benefit entirely if they had been receiving the maximum amount.
Despite the proposed reductions, the state Treasury Department estimates about 90% of the roughly 438,000 homeowners currently eligible for Stay NJ would still qualify for some level of benefit.
The proposal also includes changes to the state’s $2.3 billion ANCHOR program. Base payments would remain unchanged — $1,500 for homeowners earning up to $150,000 and $1,000 for homeowners earning up to $250,000. Renters would continue receiving $450.
But senior homeowners would lose the program’s $250 bonus payment, while senior renters would keep the additional benefit. The bonus had been expected to expire in the coming fiscal year, NJ.com added.
The $350 million Senior Freeze program, which reimburses eligible seniors and people with disabilities for property tax increases, would reportedly continue unchanged.
Even with the reductions to Stay NJ, said the three programs together would cost the state a record $4.2 billion, NJ.com reported.
