Murphy’s proposal, called Anchor, would apply to 1.8 million residents to help offset the nation’s highest property taxes, averaging $9,284 last year. It would replace the Homestead Rebate program, which has shrunk over several years due to budget constraints, and quadruple the pool of those eligible.

“Inconsistent funding and constantly changing rules have led many to never really fully know whether they qualify for a rebate, how much it would be or when it would arrive,” Murphy said Thursday at the program announcement in Fair Lawn. “The time has come to recognize that continuing to rewrite and rewrite the Homestead program renders its meaning to more and more families meaningless. Continuing along this path is no longer tenable.”

The Anchor plan will be a bargaining chip in legislative negotiations after Murphy on March 8 introduces a successor to the current year’s spending plan for $46.4 billion, a state record.

The state is flush with a multibillion-dollar cushion as a result of federal COVID-19 aid and revenue collections about 20% beyond forecasts. Murphy has spoken about the plan to fellow Democrats who control the legislature, his administration said, and Republicans have been asking the governor for property-tax relief since he came to office in January 2018.

New Jerseyans historically cite property taxes as their top gripe in public opinion polls. By fiscal 2025, Murphy projects rebates averaging $1,150 per household, at a cost to the general fund of $1.5 billion. The Homestead rebates, started by former Democratic Governor Jon Corzine, are based on 2006 property-tax bills and average $626, according to the governor’s office.

Murphy, 64, a retired Goldman Sachs Group Inc. senior director, started his second term in January with a pledge not to raise taxes. In November he became the first Democratic New Jersey governor to win re-election since 1977, though by less than 3 percentage points, narrower than projected.