TRENTON – Gov. Phil Murphy, Speaker of the Senate Stephen Sweeney and Speaker of the Assembly Craig Coughlin announced additional Fiscal 2022 Budget deals that will invest in New Jersey’s long-term economic growth by making more accessible university and more affordable retirement.
“In our continued effort to build a more resilient post-pandemic future for our state, this budget lays the foundation for a more affordable New Jersey, where everyone has the opportunity to thrive from adulthood through retirement,” Murphy said. “We are providing the resources to help parents save to send their children to college, help graduates get a fresh start in life without the overwhelming burden of student loans, and help seniors age in place by securing a most of their hard-earned retirement income. . “
“I am extremely pleased that the final budget agreement reflects one of my top priorities: increasing the affordability of living and working in New Jersey,” said Sweeney (D-3e). “These investments can make an immediate and substantial difference for thousands of New Jerseyans, especially seniors and those pursuing a college degree.”
“The cost alone cannot be the barrier that keeps young people in our state from pursuing their dreams of going to university, and the cost alone cannot be what keeps retirees from staying in. their community, ”said Coughlin (D-19th). helps break down the cost barrier so that children or family members can afford college, the burden of student debt can be reduced and more money can be kept in the pockets of retirees. In making New Jersey more affordable, the state will continue to be a place where people can raise their children, grow their families, and put down roots throughout their lives.
According to a statement, the governor and legislative leaders agreed to a comprehensive Coughlin-backed college affordability program that helps those saving for college, as well as current students and those who are paying off their loans. Among the measures agreed in the new finance law and relevant legislation are:
- Garden State warranty extension – The agreement reached will modify the governor’s initial budget proposal by offering two years of free tuition at public higher education institutions for students enrolled in third and fourth years with household incomes of less than $ 65,000, and by also guaranteeing discounts on tuition fees which will gradually be on a sliding scale for students whose income is between $ 65,000 and a higher income threshold to be defined by the institutions. The program is expected to benefit tens of thousands of New Jersey students, and the budget includes an additional $ 50 million for the results-based funding formula and the implementation of the new program.
- Maximize the affordability of colleges – The budget agreement includes legislation that creates new tax deductions for:
- a) Contributions of up to $ 10,000 to an NJ Better Education Savings Trust (NJBEST) 529 account for households earning up to $ 200,000. The estimated annual cost to the state is approximately $ 16 million in lost revenue;
- b) Contributions up to $ 10,000 towards in-state tuition fees for households earning up to $ 200,000; The estimated annual cost to the state is $ 67 million in lost revenue; and
- c) Interest and principal payments on New Jersey College Loans to Assist State Students (NJCLASS) up to $ 2,500 per year for households earning up to $ 200,000. The estimated annual cost to the state in lost revenue is $ 4 million.
- NJBEST matching contributions for those who need it most – To encourage university savings among low-income residents, the state will also provide $ 10 million in matching payments of up to $ 750 for taxpayers with incomes below $ 75,000 when they contribute to the fund. opening of a new NJBEST 529 university savings account.
The FY2022 budget deal also includes a key component to making retirement more affordable for nearly 70,000 older taxpayers under legislation (A-5539) sponsored by Assembly Member John Burzichelli that will increase the amount of retirement income that may be excluded each year from tax, including pensions, annuities and other specified retirement income.
“The increase in the retirement income exclusion limit allows us to offer even more financial stability to our retirees living on fixed incomes,” said Burzichelli (also D-3e). “Better alignment of tax breaks with the current cost of living, as expected as part of the expansion, ensures that New Jersey continues to be a place where our seniors thrive. This raised income cap comes with financial flexibility for nearly 69,000 residents, flexibility that will help seniors stay involved in their local economies, allowing them to continue to prosper during the recovery.
Currently, only retirement income up to $ 100,000 is excluded from tax under a 2016 law that created a cliff where taxpayers who earned even $ 1 over $ 100 $ 000 must pay taxes on the entire amount. The budget accord and accompanying legislation will solve this problem by raising the income exclusion threshold to $ 150,000, helping nearly 70,000 older taxpayers.
Those with income between $ 100,000 and $ 125,000 will be eligible for up to 50% of the maximum deduction of $ 100,000, depending on their filing status, while those with income between $ 125,000 and $ 150,000 will be eligible for up to 25% of the maximum deduction of $ 100,000, depending on their filing status. The total cost to the state in lost revenue is approximately $ 111 million.