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February 25, 2014

Re:  SFY 2015 Budget Proposal Presented to the Legislature

Dear Mayor:

Today in Trenton, Governor Christie presented his proposal for the State’s next budget to a Joint Session of the State Senate and General Assembly. A summary of the Governor’s Budget Proposal is available on-line at .
“Municipal Aid,” as defined by the State, will increase $32.2 million in the proposed budget. Within that total, CMPTRA/ETR funding will remain level; Transitional Aid would go up $27 Million; Meadowlands Adjustment Aid of $6 million would be eliminated; Open Space PILOTS would go up $5.9 million; and the funding for “Consolidation Implementation” would increase by $5.3 million.

The Governor, noting the high percentage of increased State spending (96%) will go toward public employee pensions, health benefits and debt payments, called for further public employee pension and health benefits reforms. The Governor also noted that the previously enacted pension and health benefit reforms will result in reduced local liabilities. Specifically, local costs would have been $135 million more, in the coming year, if those reforms had never been enacted.

League President Mayor Suzanne Walters noted, “While property tax relief funding has not been reduced, New Jersey municipalities will, once again, balance their budgets without the benefit of all the property tax relief funding that is their due.”

Municipalities lost $331 million in combined Energy Tax and Consolidated Municipal Property Tax Relief Aid (CMPTRA) funding in Fiscal Years 2009, 2010, and 2011, while also being denied scheduled incremental funding. That $331 million has been used in each succeeding year to balance the State’s annual spending. The proposal would continue this practice for yet another year.

Mayors Walters added, “In the face of these challenges, keeping property tax increases down would not have been possible without real bi-partisan reforms enacted by the Governor and the Legislature. For things like the 2% cap on arbitration awards and pensions and benefits reforms, the Governor and Legislative leaders deserve our thanks and recognition. It took political courage to advance those reforms.

“Looking at the Governor’s budget proposal, again, makes the need to continue these policies more obvious than ever. As the first order of business, we call on State policymakers to take action to ensure that the limit on police and fire contract arbitration awards remains in place.”

Unless the Legislature acts to extend the April 1 ‘sunset’ of the limitation on arbitrator awards for police and fire personnel salaries, steps and longevity payments to an average of 2 percent annually over the life of a contract, our taxpayers will lose that essential protection.  Such awards would immediately threaten funding for all other municipal services. And, in the not-too-distant future, such awards could force local budget makers to reduce public safety staffing levels, as fewer local employees steadily take home higher percentages of local funds.

We will continue our analysis of the Governor’s proposal, as more specifics become available, and we will keep you update on all developments as the Legislature conducts its deliberations on the document that must be enacted by June 30.

Very truly yours,

William G. Dressel, Jr.
Executive Director





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