Murphy Announces Plan To Help NJ Homeowners Hit Hard By New Tax Law
FAIR LAWN, N.J. (CBSNewYork) -- New Jersey Gov.-elect Phil Murphy says all options are on the table to help taxed-out homeowners.
When it comes to paying property taxes, many people fear what's ahead now that Washington has limited the amount of state and local taxes that can be deducted from federal taxes to $10,000.
"They are high," Fair Lawn resident John Barriento said of his property taxes. "They are very high."
Murphy, U.S. Rep. Josh Gottheimer (D-Wyckoff) and other Democratic leaders announced a relief plan Friday using charitable deductions, CBS2's Meg Baker reported.
State and local governments can establish funds to pay for services such as schools, law enforcement and infrastructure. Residents can voluntarily contribute.
"Instead of paying $13,000 in property taxes, that family in Fair Lawn can make a charitable donation of the $13,000 to the Fair Lawn General Charitable Fund, and if the town provided a tax credit for all or part of that contribution, their cost could be mostly or fully offset by the tax credit," Gottheimer said.
That $13,000 could become fully deductible under federal tax law. Gottheimer said the total paid out of pocket would not change.
Barriento wants to see how that money would be managed by the town.
"I would like to see the fine print in that," he said. "I would like to see who regulates that, who oversees that."
Republican state Sen. Steve Oroho, of Franklin, said this option could hurt other charitable organizations, and lawmakers should be focused on "the real driver, (which) is we've got to do something about our property taxes."
Murphy's other plan is to raise hundreds of million of dollars in revenue by legalizing marijuana. But U.S. Attorney General Jeff Sessions has announced the repeal of an Obama-era policy that protects legalized marijuana programs. That decision could undermine Murphy's plan, but he doesn't think it will.
"It does not," Murphy said. "And we weren't surprised when he came out with this. It was written on the back of a cocktail napkin, as far as I could tell, and we are still very focused on proceeding as we had already discussed."
Murphy said he will use every creative and legal option to battle the new federal tax law.
State Sen. Ray Lesniak (D-Union) and outgoing Gov. Chris Christie have proposed allowing homeowners to deduct property taxes on state income tax forms.
