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Brian Lehrer: Brian Lehrer on WNYC. It's early July, which means it's just post-budget season in New York City and in New Jersey. We've been talking about some of the historic items in the New York City budget for the fiscal year that began on the 1st, and we're going to talk more about those with the New York City Council Speaker Adrienne Adams on tomorrow's show. She was in such tough negotiations with Mayor Adams over the last few months.

In New Jersey, Gov. Phil Murphy just the other day signed a $54 billion New Jersey budget just before the start of the fiscal year on July 1st. One interesting contrast, New York City has about 8 million people, New Jersey as a state also has about 8 million people. The New York City budget is twice the budget of the State of New Jersey, almost exactly twice. $106 billion is the budget for the new fiscal year in New York City, $54 billion is the budget for the State of New Jersey. That's interesting.

We're going to focus on New Jersey now with our New Jersey reporter, Nancy Solomon. If you've been following it, and live in New Jersey, I'll bet one thing you're aware of is the property tax relief called StayNJ. Property tax relief is an obsession in New Jersey politics, but there often seem to be no good ways to do it. As part of the program in this case, the state will provide tax credits worth half a senior citizens tax bill up to $6,500. It's targeted to senior citizens primarily because often, they've been able to afford the property taxes on their homes during their working years, but now not so much in their retirement years, or they're going to have to lose their homes as a result.

One interesting thing to me that I saw in some of the tax relief details of the bill, it's going to extend to renters in some cases. We're going to hear about that from Nancy. We'll hear about other things. New Jersey listeners, we want to hear from you, if you've been following the details of the budget debate in New Jersey, if you've been looking at the news reports of what's in this budget, where a lot of details, to be honest, got passed in the middle of the night without much debate or public notice. What interests you here? Also, what will property tax relief mean to you if you're covered by StayNJ?

Anything else you want to say or ask Nancy Solomon, 212-433-WNYC, 212-433-9692. Call or text that number as we talk the New Jersey budget now. Hey, Nancy, welcome back to the show.

Nancy Solomon: Hi, Brian. Thanks for having me.

Brian Lehrer: Let me read from an op-ed in NJ Spotlight News by Peter Chen, senior policy analyst at New Jersey Policy Perspectives, a nonpartisan think tank. This is from last Friday, a day before the deadline. He wrote, "It's less than an hour away from triggering a state shutdown. A handful of advocates, reporters, and members of the public are sitting in a near empty committee room. No one has seen a copy of the 54 billion plus budget that's about to be voted on." Nancy, what does that scene, as described by Peter Chen, suggest about the last few weeks?

Nancy Solomon: Chaos, I think, is a fair word. I mean, come on, Gov. Murphy delivered his budget address, which comes with his proposed budget back at the beginning of March. They knew they had this deadline, they have it every year, and yet they're scrambling. This was a level of scrambling we haven't really seen before. There's always a scramble, but there were apparently a lot of problems. First of all, a lot of legislators didn't even get a copy of the budget before it was being voted, at least out of committee, if not by the floor and Republicans were furious. They said they'd been completely left out of the loop, and didn't get to see the budget.

This is a 300-page document, and apparently, a lot of the math is wrong. They're saying they're going to have to clean it up in legislation that will come later this year, and that that's routine. There's always fixes to the budget that are made, but this seems to have taken it to a whole new level. We have new Democratic leadership in the legislature in terms of people-- Steve Sweeney, longtime senate president, lost his election in 2021. The new senate president is Nick Scutari. I think this really raises some questions about his leadership.

Brian Lehrer: On Gov. Murphy's leadership, some of the context here is that he is widely seen as being interested in running for president four years from now. Do we see this in the budget or is that a separate story?

Nancy Solomon: I think it's a separate story. Barring Joe Biden dropping out of the race-- oh, you said four years from now. I still think it's a separate story. Murphy came into office with an agenda like anybody should. He spent the first four years executing that agenda. I would say as a close watcher of Gov. Murphy, I would say that his second term has been a little more-- struggling for a word to describe it. He doesn't seem to be as focused on his priorities of what he wants to accomplish.

He talked a good game at the end of his first term where he came close to losing his reelection, and then he had a come to Jesus moment, and said he was going to work on property taxes. We'll talk about that, I'm sure, today, but his measures towards property tax cuts in New Jersey really don't go very far. I just think this is part-- you can't blame Murphy for the legislature not voting on the budget till the last minute, but I think overall, we're not seeing a passionate leader who is out there every day arguing for what he wants to see happen in the state.

Brian Lehrer: Nancy, I should have said that when I introduced her, as some of you know, hosts our Ask Governor Murphy call-in on the station once a month. Let's talk about this property tax relief called StayNJ. I guess the headline here or the top line is that tax credits will be issued worth half of a senior's property tax bill up to 6,500. This is for people with incomes up to $500,000. What's new here, and who is it expected to affect in terms of, I guess, being able to stay in their homes, which I imagine is the goal?

Nancy Solomon: This is all new, 100% new. There are some rebate programs that seniors can participate in, but we're not talking the kind of dollars in those programs that you're seeing here with this one. It was going to be up to a 10,000 cut. Half of your property taxes, you get back up to 10,000. The compromise with the governor to get the budget bill passed was to bring it down to 6,500, which makes less impact on the overall budget of the state. There was no income eligibility requirement at all, and the legislature compromised with the governor on that one.

This is way more significant than previous rebate programs. Think for a minute. You've got somebody who, let's say, they pay 10,000-- I think the average is $9,000 a year in property taxes, they would get 4,500 off that. That's a pretty sizable chunk. Then there's a whole group of people who pay-- a lot of people who are not necessarily wealthy, maybe they're upper-middle class professional, college-educated, made a good salary through their earning years, but now they're retired, and they could have a property tax bill upwards of $20,000 a year. That's where people run into problems being able to either the choice to retire or to stay in your home after you retire.

If you're paying $2,000 a month in property taxes, even for people who are upper-middle class, that is too much of a burden. That's what the Democratic leaders in the legislature were trying to fix. We'll see what happens. This doesn't go into effect until 2026, so this could be messed with a lot between now and then.

Brian Lehrer: Well, let's see what Cynthia in Jersey City thinks about this. Hi, Cynthia, you're on WNYC.

Cynthia: Hi. I'm just concerned. I'm one of the many Jersey City residents and probably other City residents who have benefited from the Senior Freeze program where you were able to file for a base rate before revaluation. Sometimes rebates threaten that, because if your taxes fall below what your freeze base rate was, then you lose your senior freeze year and you have to apply all over again, and your base rate would be whatever your assessment is in that year. I'm hoping they've sort that out and it's just something that worries me because many of our taxes doubled during the reval.

Nancy Solomon: I can't answer exactly. I believe that this could reset the clock on the Senior Freeze for individuals who fall into that category. That's something we're going to have to follow up with you about. I do think for a lot of people, freezing your taxes doesn't solve the problem, right? For some people it might.

Cynthia: No, no. My taxes went up about a third in the last two years.

Nancy Solomon: That's a problem. If you got the freeze in time to stop that, then you're good, but for people who are retiring into the future and their taxes are already high, freezing them at a high rate doesn't help them. I think it's fair enough for-- it's laudable, I'll go that far to say, to see the democratic leadership in the legislature trying to do something about this. Always the devil is in the details.

Cynthia: Oh, I agree. I just hope that they will think it out as clearly as they can to protect seniors whose home may be their only wealth, and they may want to stay in the community where they've spent their whole lives. I'm hoping that they are taking that into account, which they possibly are.

Nancy Solomon: I think that's-- I'm sorry, Brian.

Brian Lehrer: Go ahead.

Nancy Solomon: I Think that's precisely-- that is the problem. Property taxes are high for all homeowners in New Jersey, but for people who either are wanting to retire and can't afford to retire, or are retired or will retire but will move out of their homes and seek a cheaper place to live, those are serious problems. They're not the problems that affect-- the progressives in New Jersey have fought this proposal because it gives more to people who have more, so it's regressive in that sense.

To me, there is a serious moral problem on the table here where if people can't stay in their homes after they retire, and we're not talking about people who are in their 80s and the home becomes too big, and they move to an apartment, we're talking about people in their 60s and 70s who would like to stay in their homes and can't. I think it's an interesting idea and I would hate to stake my reputation on that it's going to be effective, but I have hopes that they can work out some details to make this work.

Brian Lehrer: You mentioned it being regressive, and I know the original version of this proposed by one of the legislators did not have an income cap. You could have gotten this half of your property tax bill removed up to $6,500 no matter how much money you make. The cap they put on it is pretty high. If you have an income up to $500,000, you're still going to get this tax relief, so I guess you'd say it's regressive in that sense. Why didn't they set it much lower?

Nancy Solomon: That was part of the negotiating process with the governor. He loves the term means tested. He will use that at every turn, in every chance he gets, and he loves that idea. He is a very wealthy person himself, and he came from a working-class family, and he believes in this really wholeheartedly. I'm sure he wanted that eligibility requirement to be lower. The program that he pushed forward called the ANCHOR rebate program has a 250-- I think it's 250, but it's thereabouts, $250,000 annual income for a couple or an individual. I'm sure he wanted it closer to that, and this was part of the negotiation with the legislature.

Brian Lehrer: Karen in Closter, you're on WNYC. Hi, Karen.

Karen: Hi, good morning. My husband and I are retired. I'm retired for 10 years. He's retired about seven. We want to live close to our grandchildren, 10 minutes and 40 minutes away. We made the calculation that we'd be able to stay here with the house that's paid. Many other people have made that calculation. I don't need them. I'm not saying I couldn't use the money, I'm not independently wealthy, but I worked, and I saved, and I did what I had to do, and I don't think this is a good way to use my money to stay in New Jersey.

I want to stay in New Jersey, it's difficult.

Bergen County is very difficult, it's expensive, and the senior homes that they do provide are very, very-- they're unaffordable, but we made the calculation and so far, we're able to do it. I think it could be better used for other social programs like preschool and things for working people who find it difficult to stay here. [unintelligible 00:15:47]--

Brian Lehrer: Nancy, does Karen represent a lot of the political debate over this property tax relief in New Jersey?

Nancy Solomon: I don't think-- Karen's perspective represents a very large number of progressives in the state who are very active. They're advocates, they work. There's a whole range of organizations and there's a coalition of progressives that work on the budget called For The Many and their position is exactly what Karen is saying. They cite places like Closter, Karen, am I pronouncing it correctly, Closter?

Karen: You are correct, yes.

Nancy Solomon: Places like Alpine and Closter and some of the wealthiest communities in the state, they cite those places as places that are going to get the largest share of the tax break. There doesn't seem to be a very strong organization that represents what I believe is a large number of people who would support this tax break, who do feel that they have to make a choice that they don't want to make, that they would like to stay in their homes, and they can't afford it.

It's interesting. The Republican party used to advocate for this more, and right now, they're very caught up in other things, transgender rights and such, and the moderate wing of the Republican party is greatly diminished in New Jersey and even more greatly diminished around the country, but here it's diminished. You are not seeing a lot of advocacy for people who would want this.

I don't know, in my world personally, the one that I live in and observe, and I try not to universalize my experiences as a reporter, but I see, and particularly because of my age, I'm a generation of parents in a suburban town where our kids are either finishing college or going off to college, but in that age range. I know very, very few people who are going to stay. Everybody is looking to reduce their costs. They want to retire, and they need to downsize to retire. It's not just downsizing because people have paid off their houses. It's really the property tax bill.

Brian Lehrer: Karen, thank you for your call. Does this play into what we sometimes might think of as a culture war but is also economic between Gov. Ron DeSantis of Florida and New York and New Jersey, where DeSantis is wooing New Yorkers and New Jerseyans to move down there, largely on the basis of taxes, and New York and New Jersey are saying, "Hey, young Floridians, move here because you're going to have educational freedom, you're going to have reproductive freedom," and things like that.

Nancy Solomon: I think that's happening at the level of rhetoric between Gov. Murphy and Gov. DeSantis. I think on the ground, what I see is that people don't necessarily-- some people move out of state and move to the South where they can live much more cheaply. I see a lot of people just moving across a town border to get into-- because one of the problems with New Jersey's tax system is, and the ways that it is unfair is that each town has its own tax rate and its own base based on its budget needs basically, and so you can have one town that has let's say a shopping mall, and they get a huge amount of taxes from that shopping mall, and so they can keep their residential taxes lower. Towns that don't have-- New Jersey people talk about them as ratables, those commercial taxes, and don't have ratables, and the residential property taxes are quite high. You have people who aren't necessarily leaving New Jersey, but they have to leave the home that they've paid off, which is a huge source of wealth for people. I don't want to discount that, but they have to leave the town where they've lived and raised their kids and move to a cheaper town in New Jersey.

Brian Lehrer: We have a listener texting us a question. It says, "Hi, Brian and Nancy. My understanding is that the new property tax relief will not extend to renters. Is that correct?" Nancy, correct me if I'm wrong here, but my understanding is that the StayNJ property tax credit that we've been talking about is only for homeowners and homeowners who are senior citizens, but that there is a separate property tax relief initiative in this budget called ANCHOR, in which the budget sets aside $2 billion to provide rebates to some renters, as well as some homeowners. So are renters included in any tax relief?

Nancy Solomon: Exactly as you described. They boosted the amount of payments for renters. That was also part of the compromise between the governor and the legislative leaders. The ANCHOR program will now have more money to give to renters as part of that rebate. I can't remember if it's $450 or $500 per person.

Brian Lehrer: Per year?

Nancy Solomon: Per year.

Brian Lehrer: How does the renter get a property tax credit if it's the owner who pays the property taxes? How does that work?

Nancy Solomon: Well, they don't. They apply as a renter, and they get it direct to them. I think some people would argue who are pro-cutting property taxes would argue that if the landlords, the owners of buildings that are properties that rent to people, if their costs are reduced, that they could pass on those costs to renters. Now, is that likely? I wouldn't expect it to be. I don't think you're going to see a wave of rents going down if property taxes are cut, but it might stop the continual rise in rents as a result of it. I think that's a reasonable expectation.

Brian Lehrer: We're almost out of time. We've spent most of our time talking about what is so often the number one issue in New Jersey, and that is property taxes and property tax relief, as items in the new state budget that was agreed to just before the new fiscal year started on July 1st.

Let me touch a couple of things other than that with you real briefly, Nancy, before we run out of time. I understand that the budget also doubles the Child Tax Credit. Listeners to this show certainly remember that at the end of the pandemic, it was assessed that increasing the Child Tax Credit at the federal level, which was a pandemic emergency measure that expired, was believed by many economists to have cut the child poverty rate in half in the United States. Talk about this increase in the Child Tax Credit at the New Jersey State level, and what the impact could be.

Nancy Solomon: Yes. Progressives are very happy that this is in the budget. It got doubled from what was there last year. For any family earning up to $80,000 a year, they're eligible to receive credits for every child under the age of six, and those credits have been doubled. It ranges depending on your income from $200 per child to $1,000 per child. That's a big win for progressives. Overall, the impact on the budget is $120 million.

Meanwhile, the state added to its corporate tax break program and is giving the film industry $200 million next year in tax credits. That was pointed out to me by New Jersey Policy Perspective that there was an issue of budget priorities here they're not thrilled with, but they are super happy with the Child Tax Credits.

Brian Lehrer: Yes. I see New Jersey Policy Perspectives lists, "Too many corporate giveaways as the downside of this budget." You mentioned the film industry. Are there others that you have top of mind?

Nancy Solomon: Yes. I'd say the one that they feel is the worst, and that got the most attention during the budget season was the corporate surcharge tax on profits. What Murphy had done in his first term is they had boosted the tax rate on profits for any company that earns more than $1 million in profits a year. We're not talking about small business people, that's profit, not their total sales. Murphy wanted to sunset that. It was put in as a temporary and he says that he's made a promise to business people, and he wants to also improve the business climate in New Jersey.

He is sunsetting, it's called. He's letting it expire. That is worth $1 billion each year to the state budget that will no longer be coming in.

Brian Lehrer: Last question. This is probably too big for the scope of this conversation, but I refer to it in the intro. New Jersey has about the same number of people as New York City. The whole state of New Jersey is about 8 million people. The city of New York has about 8 million people, but the whole New Jersey state budget is only half the city's municipal budget. $54 billion for the state, $106 billion is the new fiscal year budget just for New York City. What's the city spending so much money on that New Jersey is not or vice versa?

Nancy Solomon: Oh, boy. [chuckles] I did not know that fact. I find it's amazing. It's an amazing fact. I don't know what the numbers say. I would imagine that New Jersey does not spend enough-- these are the things I know. I know that New Jersey does not spend enough on mass transit to have a fully functioning mass transit system. I know that New Jersey does not spend even what it is, by law, supposed to spend on school funding and making payments to local school districts out of the state budget to assist in the funding of local schools.

I know that New Jersey has not fully funded its pension for retired state workers. Murphy's done a good job of making the full contribution since he's been in office, but there was a huge deficit there. The Clean Energy Fund, which is a mechanism for financing clean energy investments has been rated. I can tell you what the problems are with the New Jersey budget.

Brian Lehrer: [unintelligible 00:27:49] that example.

Nancy Solomon: Knowing what it's like to travel around New York, I'd say probably it's the mass transit system is better funded, and I wouldn't be at all surprised if the schools are better funded.

Brian Lehrer: All right. The conversation would start there. We could get some accountants on and do a whole series on the difference between New Jersey and New York City budgets. Nancy Solomon, if you want to know, folks, what's going on in New Jersey, follow Nancy Solomon's work, including her monthly Ask Governor Murphy call-in on WNYC. Do you know when the next one is? Off top of your head, do you have that date?

Nancy Solomon: I think it's something like August 20th. We're taking July off.

Brian Lehrer: All right. Everybody deserves July off. Nancy, thanks a lot.

Nancy Solomon: Thanks, Brian.

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