Can tax relief keep seniors from fleeing NJ? Some worry about the cost.

You’ve heard of “brain drain.” How about “elder drain” — senior citizens fleeing high tax states for more affordable climes?

New Jersey, which has the highest property taxes in the country, has a plan to stem the exodus of older residents with a generous new tax break. But some question whether the state can afford it in the face of President Donald Trump’s looming budget cuts. And state lawmakers are negotiating the program’s future as they finalize their spending plan for 2026.

StayNJ was signed into law in 2024. This coming fiscal year will be the first to include the program, which could allow all seniors making $500,000 or less to chop off up to $6,500 of their property tax bills. Unless changes are made, it would cost $1.2 billion each year, according to the legislation.

It’s just one of a number of tax relief programs the Legislature has rolled out over the past several years to both make the state more affordable for some and keep seniors in the state. According to a report by WalletHub, New Jersey homeowners paid taxes on average of $9,541 in 2023.

But on the eve of its implementation, some policy groups are not only concerned about StayNJ’s cost, they’re also skeptical that it will help the state hold on to a wide swath of the 65 and over set.

Peter Chen, a senior analyst with nonpartisan think tank New Jersey Policy Perspective, said New Jersey officials should reconsider the plan given the Trump administration’s proposed cuts to state funding from the federal government.

“ We're staring down potentially $3.6 billion in federal Medicaid cuts. That would make it very difficult to continue to fund even the basic services that the state provides,” he said.

New Jersey Policy Perspective, one of the state's most prominent progressive think tanks, proposes lowering StayNJ’s income threshold from $500,000 to $150,000 and capping the credit at $5,000. Chen said that would cut the cost of the program in half.

Gov. Phil Murphy was in talks earlier this week with Assembly Speaker Craig Coughlin, StayNJ’s architect, about paring it back before the state budget is finalized, according to Politico.

Coughlin spokesperson Rhonda Schaffler said the speaker’s office would not make any comments on the program until the budget is finalized. Murphy’s office also declined to comment.

Who gets what

Even some New Jersey seniors in line to receive the tax break are split on whether StayNJ is the right thing to do.

Ann Lippel, the executive president of Montclair Aging in Place, said she’s lived in town for 50 years, and that she welcomes the program because it “ doesn't exclude people who are middle class.”

Many friends her age in the community who own their homes haven’t benefited from other tax relief programs because they didn’t fall under the income threshold, she said.

“Every person who's reached this, I'm going to call third act, deserves to be included in this,” she said.

Then, there’s the opposite view.

Ellen Steinberg, chair of the New Jersey Senior Citizen Council, and her husband Peter Humphreys are seniors in Short Hills. They would be eligible to receive the full $6,500 credit under StayNJ. But they said they oppose the program because it focuses too much on relief for already wealthy homeowners.

The first year the program would allocate about $200 million to approximately 30,000 seniors making between $250,000 and $500,000.

“Why are we as a state, giving that money to this category of people when there are all kinds of old people who are living hand to mouth to afford to rent an apartment?” Humphreys told Gothamist.

Since 2024, they've been traveling around the state giving presentations to seniors on how StayNJ and other tax relief programs may or may not benefit them.

Steinberg said the answer is tricky to calculate.

She said she’s spoken with many seniors who think StayNJ will reimburse them for half their property tax on top of other benefit programs. ANCHOR and Senior Freeze, for example, already offer seniors tax rebates for those with incomes under $250,000 and $168,000 respectively.

“ I said, ‘No, it doesn't work that way.’ And they were devastated,” she said.

Instead, rebates are deducted from the StayNJ tax break. Here’s how the math works:

A senior paying around $4,000 in property taxes could be eligible for $2,000 from StayNJ. But ANCHOR provides seniors up to $1,750 in tax rebates. Add in other programs and that senior might not receive anything from StayNJ.