Our seniors deserve to retire securely — that’s why Phil Murphy has worked to pass new tax cuts for retirees with incomes up to $150,000/year.
Students and senior citizens can expect financial perks under a budget deal announced by state leadership Tuesday.
The agreement would provide two years of free tuition for certain students of public colleges; create new college tax deductions; match college savings payments for low-income families and raise the amount of income excluded from taxes for retirees.
The benefits are included in a proposed $46.4 billion spending plan for the 12-month budget year that begins July 1.
The plan includes the first full payment into the troubled pension system in nearly 25 years, strategies to pay down debt and additional property tax aid for seniors and disabled homeowners, among other things.
Lawmakers' budget, outlined in a 280-page bill, was made available to the public late Tuesday afternoon, just minutes before panels of lawmakers in the Senate and Assembly gave it initial approval.
Despite the heft of the bill itself and its consequence for how taxpayer dollars are spent, members of the Senate budget committee took public input and voted to pass the bill in under 13 minutes.
The votes clear the way for the Senate and Assembly to send the budget tome to Gov. Phil Murphy's desk as soon as Thursday.
Much of what is publicly known about the spending plan was revealed through joint statements from Murphy and legislative leaders, who have been negotiating the budget behind the scenes.
Those agreements include the perks for students and senior citizens, which "lay the foundation for a more affordable New Jersey where everyone has the opportunity to prosper from young adulthood well into retirement," as Murphy put it.
"We’re providing the resources to help parents save to send their children to college, help graduates get a fresh start in life without the crushing burden of student loans and help seniors age in place by guaranteeing more of their hard-earned retirement income," Murphy said in a joint statement with Assembly Speaker Craig Coughlin, D-Middlesex, and Senate President Stephen Sweeney, D-Gloucester.
The agreement will cost the state at least $182 million in foregone revenue, according to the joint statement.
Most of that foregone revenue, $111 million, is expected to cover raising the income tax exemption for an additional 70,000 seniors, the statement said.
Under current law, up to $100,000 in income is excluded from taxation.
The agreement to pass bill A-5539 — which was introduced last month and has not had a public hearing in either legislative chamber — would raise the income threshold to $150,000.
“Raising the retirement income exclusion limit allows us to provide even more financial stability to our retirees living off fixed income,” said Assemblyman John Burzichelli, the bill's prime sponsor, in a statement.
The college-related bills would do the following:
Expand Garden State Guarantee program
The program provides two years of free tuition at public colleges for students enrolled in their third and fourth years with household incomes of less than $65,000.
It's expected to benefit "tens of thousands" of New Jersey students, according to the statement, and the budget includes $50 million for it in addition to funding for community college tuition.
More:A bigger pension payment, stimulus spending: Here's what's in NJ lawmakers proposed budget
Create new tax deductions
The budget deal creates new tax deductions for contributions of up to $10,000 into an NJ Better Education Savings Trust 529 account for households earning up to $200,000.
It also creates tax breaks for contributions up to $10,000 for in-state tuition payments for households earning up to $200,000 — as well as payments of interest and principal toward New Jersey College Loans to Assist State Students of up to $2,500 per year for households earning up to $200,000.
Install matching payments
The agreement also includes providing $10 million in matching payments of up to $750 for taxpayers with incomes below $75,000 when they make a contribution to open a new NJBEST 529 College Savings account.
Source: New tax breaks for NJ college students, senior citizens. What to know (northjersey.com)