New Jersey budget deal narrows Stay NJ eligibility while preserving $6,500 benefit

Sherrill and legislative leaders say changes will make the program more sustainable while preserving aid for lower- and middle-income retirees.

Gov. Mikie Sherrill and Democratic leaders in the Legislature announced Tuesday that they have reached an agreement on a $60.7 billion state budget that preserves the Stay NJ property tax relief program while reshaping it to direct more aid to lower- and middle-income seniors.

The agreement, which must still be approved by lawmakers by the June 30 budget deadline, would increase the state’s surplus, reduce a projected budget gap, and expand the Child Tax Credit, according to a joint statement from Sherrill, Senate President Nick Scutari, and Assembly Speaker Craig Coughlin.

“We are pleased to have worked closely together to reach an agreement on an FY 2027 budget that makes New Jersey more affordable and protects our state from the Trump Administration’s dangerous policies that harm residents,” the three Democratic leaders said in a joint statement.

The future of Stay NJ emerged as the central issue in budget negotiations this spring. The property tax relief program for seniors was approved in 2023, but the program did not actually begin sending out benefits until 2026.

While details have not yet been released, according to some news reports, the agreement would reduce benefits for some higher-income seniors and lower the program’s income eligibility limit from $500,000 to $200,000. The maximum benefit of $6,500 would remain available for eligible seniors. The legislation implementing the changes has not yet been introduced.

The revisions reflect a compromise between Sherrill, who sought to reduce the program’s cost and cap the maximum benefit at $4,000, and Coughlin, who has made Stay NJ one of his signature affordability initiatives.

AARP New Jersey praised the agreement, saying it preserves a benefit many older residents had been counting on as property taxes and other living expenses continue to climb.

“As older New Jerseyans continue to face rising property taxes, utility bills, housing costs, and other everyday expenses, meaningful property tax relief remains critical to helping residents remain financially secure and continue living in the homes and communities they love,” AARP New Jersey State Director Chris Widelo said in a statement.

“For months, we have heard from older adults across New Jersey who were counting on this benefit,” Widelo said. “Many have already planned their household budgets around the promise of Stay NJ, and today’s agreement provides important certainty for residents facing ongoing affordability challenges.”

The organization also pointed to recent survey findings showing that more than one-third of New Jersey residents age 45 and older have considered leaving the state in the past year, with affordability concerns among the leading reasons.

State leaders said the revised program would continue to provide significant property tax relief while placing it on a more sustainable financial footing.

“The $60.7 billion budget provides tax relief to New Jerseyans who need it most while investing in our shared future with an expanded Child Tax Credit benefit for families,” the governor and legislative leaders said in their statement.

They added that the budget includes what they described as the largest property tax relief package in state history and ensures Stay NJ remains “a sustainable benefit retirees can count on.”

Beyond Stay NJ, the budget agreement would leave New Jersey with roughly $6 billion in reserves and cut the state’s projected structural deficit roughly in half, according to state officials.

The agreement also includes an expansion of the Child Tax Credit and restores some spending priorities sought by lawmakers that were not included in Sherrill’s original budget proposal.

In their joint statement, the three leaders said the larger surplus would help New Jersey withstand potential federal funding reductions affecting programs such as Medicaid, food assistance, health care, and job programs.

The final budget remains at the same overall spending level Sherrill proposed in March, a departure from recent years when lawmakers added hundreds of millions of dollars to the governor’s spending plan during negotiations.

Some issues remain under discussion, including proposals to raise additional revenue through changes to business tax laws and whether the state will provide financial assistance to Jersey City as it confronts a significant local budget deficit.

Budget legislation must be introduced and voted on before July 1.