I’m writing because of what happened to this program over the last eighteen months – and what it tells you about every other promise your retirement plan is counting on.
Promised in February. Cut by June.
New Jersey created a program called Stay NJ.
The promise was simple and generous: cut a senior homeowner’s property tax bill in half, up to $6,500 a year, for anyone with income under $500,000.
In this state, that’s real money. According to New Jersey’s own average residential tax report, Bergen County’s average bill was $13,600.
In February, the first checks went out. Roughly 430,000 households.
The average first installment was $637, paid quarterly.
People had waited years for this. They built it into their budgets.
Five weeks later, the governor’s first budget proposed cutting it: maximum down to $4,000, income ceiling down to $250,000.
The Assembly Speaker who wrote the law said publicly that $4,000 was too low.
He said it at a town hall hosted by AARP, to an audience of the people counting on it.
But the Treasury had already given the Budget Committee the arithmetic.
Holding the benefit at $6,500 while lowering the income limit would cost $344 to $372 million more.
To hold it there without raising costs at all, the income limit would have to fall to $125,000.
There was no version of that conversation where seniors got what the law promised.
Only a question of how much less.
The budget was signed June 30. The maximum stayed at $6,500 – but the income ceiling dropped to $200,000, and it’s now tiered:
- Under $100,000: up to $6,500
- $100,000 to $150,000: up to $5,000
- $150,000 to $200,000: up to $4,000
- Over $200,000: nothing
This year’s payment was reduced as well.
The third-quarter check was split in half, part in August and part in November, which, in the Division of Taxation’s own words, “will result in recipients receiving a lower overall benefit for calendar year 2026.”
AARP called it a 25% cut.
And they said what I think is the truest sentence in this whole story: many older homeowners had already planned their household finances around receiving the full benefit.
Read the Footnote
Go to the state’s website today and look at the new benefit table. $6,500, $5,000, $4,000, zero.
There’s an asterisk on it.
The asterisk says the maximum benefit is presented assuming no changes to the program in the Fiscal Year 2028 budget.
Read that again.
The agency that administers the benefit is telling you, in a footnote, that next year’s number is not yet a number.
That isn’t a scandal.
It’s honest, actually. It’s how state budgets work – each of these programs is subject to annual appropriation, and the application booklet says so in plain language on the first page.
But it is a fact about your plan. If a benefit can be revised eighteen months after the first check goes out, then it isn’t a foundation. It’s a bonus.
And a lot of people are treating it as a foundation.
The Detail That Costs $6,500
This next part is more technical. If you’re in the income range where this matters, it’s the most valuable ninety seconds you’ll spend today.
New Jersey’s definition of income for this program is not the same as the federal definition your accountant works with. I went through the application instructions.
The figure they use adds your New Jersey total income, plus tax-exempt interest, plus certain Roth amounts.
Then it adds your entire Social Security benefit, straight from Box 5 of your SSA-1099.
New Jersey doesn’t tax your Social Security. But it counts it here.
So somebody who reasons my Social Security isn’t taxable in this state, it doesn’t count toward the limit has just understated their income by $30,000, $40,000, $50,000.
There’s a second one.
If you convert a traditional IRA to a Roth, the taxable amount flows into your New Jersey income, which flows into this calculation.
Think about what that means.
And I want to be clear before I say it: nobody in this scenario did anything wrong.
You sit down with your accountant. You do a Roth conversion for entirely sound federal reasons – lower brackets now, smaller required distributions later.
Textbook.
And in doing it, you may push yourself over a state threshold nobody modeled, and forfeit up to $6,500 a year in property tax relief.
The federal plan and the state benefit are measuring two different things. Nobody was looking at both at the same time.
One practical note. If you think you might qualify, file.
The deadline is November 2, the application covers Senior Freeze, ANCHOR and Stay NJ all at once, and the state decides which ones you’re eligible for. Don’t exclude yourself.
It Didn’t Take Years
Here’s the point, and it’s bigger than this program.
I’ve spent my career telling people not to build a retirement on institutions that can change the terms.
Usually I’m talking about Social Security, and the response I get is that the trust fund date is years away and Congress will figure something out.
Fine. But it didn’t take years.
This one was promised, delivered, and revised in eighteen months. In your state. On your street. With a footnote telling you it may change again.
In my system, the work that answers this is Income Architecture.
And the thing almost no retirement plan does is separate two kinds of money that look identical on a statement.
There’s what you’re owed.
Pensions, annuity contracts, your own portfolio. Somebody is legally obligated to pay you.
And there’s what you’re granted.
Programs funded by an annual budget. Benefits with an asterisk on them.
Both show up in your monthly income.
Only one of them can be voted away.
I’ve never had someone come to me with that already sorted out.
Not once.
And until it is, nobody can tell you what your plan looks like in a bad appropriation year – because nobody knows how much of it is sitting in the second category.
That’s the conversation worth having, and it isn’t one you can have with a statement.
If you want to know which parts of your income are the ones that can be revised out from under you, schedule a session at jonathanpeters.net/consultation.
Because a plan that only works if every promise holds isn’t a plan.
It’s a hope with a spreadsheet attached.
Best regards,
Jon
Sources
- NJ Division of Taxation, Stay NJ: https://www.nj.gov/treasury/taxation/staynj/index.shtml
- 2025 PAS-1 instructions: https://www.nj.gov/treasury/taxation/pdf/25-pas1in.pdf
- NJ Treasury press release, February 9 2026: https://www.nj.gov/treasury/news/2026/02092026.shtml
- NJ Treasury budget testimony, April 6 2026: https://www.nj.gov/treasury/news/2026/04062026.shtml
- New Jersey Monitor, June 3 2026: https://newjerseymonitor.com/2026/06/03/governor-stay-nj-tax-cut-benefit/
- New Jersey Monitor, June 29 2026: https://newjerseymonitor.com/2026/06/29/nj-budget-late-night-votes/
- Jersey Vindicator, July 1 2026: https://jerseyvindicator.org/2026/07/01/new-jerseys-60-7-billion-budget-signed-into-law-by-gov-mikie-sherrill/
- NJ MOD IV Average Residential Tax Report, tax year 2024: https://nj.gov/www.nj.gov/treasury/taxation/pdf/lpt/AvgResTax/AvgTax2024.pdf
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