February 28, 2012

RE: State FY 2014 Budget Proposal Analysis Update

Dear Mayor:

As the Division of Local Government Services (the Division) indicated in its February 27 Local Finance notice (LFN 2013-11), almost all municipalities should anticipate level aid, when CMPTRA, the Energy Tax and Watershed Aid are added together. In order to avoid the Energy Tax “poison pill,” the State will classify more CMPTRA dollars as Energy Tax dollars. This practice (authorized by wording in the budget document that permits the shift “notwithstanding” the requirements of P.L. 1999, Chap. 168) has been used in eight of the past 11 State Fiscal Years.  

The proposal would not provide Open Space PILOT funding ($6.5 million in the State’s current budget) to any municipalities during the State’s next Fiscal Year. As noted by the Division, funding was distributed last October for use in calendar year 2013 and municipalities can apply it in their 2013 budgets. Going forward, language in the Treasurer’s Budget Summary (Section V, page 80) states that municipalities “can anticipate an identical amount (the same as was distributed in October, 2012) in their calendar year 2014 budgets.” We will work with the Administration and the Legislature to ensure continuing funding for those who rely on this revenue.

Recognizing the contributions made by our volunteer first responders and the sacrifices they make to serve their fellow citizens, we thank the Governor for proposing a 35% increase in funding for volunteer first aid training.  The Emergency Medical Technician Training Fund (EMTTF) was established in 1992 to reimburse EMS volunteer ambulance, first aid and rescue personnel for costs associated with training and testing for those who are seeking certification and recertification as emergency medical technicians. The funding for the program comes from a diversion of 50 cents from municipal court costs resulting from a violation of motor vehicle laws.

Due to the initial delay in establishing the statutorily required EMTTF Advisory Council and associated regulations, and collection of funds without spending, the EMTTF had carried a surplus since inception. For years, this carry-forward surplus accommodated expenses that exceeded collections. In SFY 2009, the EMTTF retained a $4M surplus. In December, 2009, the State Treasurer transferred that $4 million from the EMTTF to the State's General Fund, in order to help offset the State's budget shortfall. Since then, funding has been limited and reimbursements only available for initial training, not for recertification.

We thank the Governor for this proposal, which will increase the training reimbursement for new volunteers from $550 to $750. And we join the Governor in thanking our emergency first responders for all they do – not only in terms of urgent care, but also for the property tax relief they provide by their selfless service.

We are concerned with a proposed diversion of $21 million from the State Recycling Fund to the General Fund. Beginning on April 1, 2008, a $3.00 per ton tax is levied on the owner or operator of every solid waste facility as well as on solid waste collectors that transport solid waste for out--of--state disposal. Monies in the fund are used for: direct recycling grants to counties and municipalities; aid to counties for preparing, revising, and implementing solid waste management plans; State recycling program planning and program funding; aid to counties for public information and education programs concerning recycling programs; and for State grants to institutions of higher education to conduct research in recycling. The statute specifies that no less than 60% of the proceeds must be returned as tonnage grants to municipalities and counties. Respectfully, we ask the Legislature to review that proposed diversion to make certain that our recycling programs get all the support they deserve.

Finally, we commend the Governor for proposing the establishment of a $40 million “Sandy contingency fund,” to cover recovery costs not funded by the Federal government. As more details become available, we will provide further analysis.

League President, Mayor Janice S. Mironov of East Windsor Township, is scheduled to testify on the budget proposal before the Senate Budget and Appropriations Committee on Tuesday, March 5. On the following Tuesday, March 12, Mayor Mironov will speak to the Assembly Budget Committee on the same topic.

If you have any questions, or if there are other State budget issues that you would like us to consider, contact Jon Moran at 609-695-3481, ext 121 or jmoran@njslom.com

Very truly yours,

William G. Dressel, Jr.
Executive Director