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February 28, 2008
Re:

More State Budget Cut Details

 

 

Dear Mayor:

Local officials have done so much with so little for so long, that State Budget-makers now believe some of you can do everything with absolutely nothing. Apparently the picture we painted in our first letter on the Governor’s Budget proposal was too optimistic. Things are indeed worse than they seemed on Tuesday afternoon.

Here are the details.

In his address to the Legislature, among the many proposed cuts, the Governor mentioned three funding areas he was forced to short-change – hospitals, higher education and municipal property tax relief. Guess which one of those faces the deepest dollar cuts? Higher Ed will be cut by $75.6 million. Hospitals will lose $143.5 million. And municipal property tax relief will be slashed by $189.6 million.

CMPTRA FORMULA FUNDING
For municipalities with a population of less than 5,000, there will be no CMPTRA funding this year.

For municipalities with a population total between 5,000 and 10,000, you will receive one-half of the amount you received in the State’s 2006-2007 budget.

For municipalities with a population greater than 10,000, you will receive the amount that you received in the State’s 2006-2007 budget.

The $32.6 million distributed according to the CMPTRA formula, which municipalities received last year as 2008 Municipal Property Tax Assistance, is gone.

ENERGY TAX RECEIPTS PROPERTY TAX RELIEF AID
All municipalities will receive level funding, despite State Law that ‘requires’ annual inflationary adjustments of this (and CMPTRA) funding.

MUNICIPAL EFFICIENCY PROMOTION AID PROGRAM
Last year, municipal efficiency was promoted to the tune of $34.8 million. This funding has been eliminated.

MUNICIPAL HOMELAND SECURITY ASSISTANCE
Last year’s $32 million is gone.

SPECIAL MUNICIPAL AID
Funding is cut from $153 million to $145.4 – a loss of $7.6 million.

EXTRAORDINARY AID
Funding is reduced by $1.7 million – from $34 million to $32.3 million.

REGIONAL EFFICIENCY AID PROGRAM
This $8 million program will not be funded.

OPEN SPACE PAYMENTS IN LIEU OF TAXES
This is the only municipal property tax relief funding that we have been able to identify that will actually increase – by $200,000, from $9.8 million to an even $10 million.

Beyond these cuts, certain municipalities served by the State Police will be asked to contribute $20 million to the State’s General Fund.  And Homestead Rebates for Homeowners will be cut by $257 million, and for Renters by $124 million.

As mentioned in our February 26 letter, one year after the historic Special Session for Property Tax Reform purportedly eliminated the need for a Citizens’ Convention, our property taxpayers will once again be asked for patience. And they will be asked to shoulder more than their fair share of the funding burden.

We have been advised that the Division of Local Government Services will issue a Local Finance Notice on Monday. That Notice will include important advice to all calendar year municipalities, regarding 2008 budget dates and procedures, levy and appropriations cap adjustments and the Local Finance Board cap waiver process. The Division will also release each municipality’s formula aid numbers.

We will soon provide you with a Sample Resolution on the Budget proposal, which you can adapt to detail the proposal’s impact on your own citizens.

Finally, we are setting up a page on our website that can be used by Mayors and other local elected officials to post your comments on the proposal. We will be sharing these comments with the Governor, Legislative Leadership, the Senate and Assembly Budget Committee Members and with your own State Legislators. We will also share some of the examples that you provide with the Press and the electronic media.

We thank Rocky Hill Mayor Ed Zimmerman for giving us the idea to establish this “Mayors’ Sound-Off page.” After reviewing our Tuesday letter, Mayor Zimmerman e-mailed to us a passionate and non-partisan piece, focused on the proposal’s impact his town’s citizens and services.

You can access the comment form and see Mayor Zimmerman’s letter at:  
www.http://njslom.org/mayor-budget-comments.html. For more information on any of this, contact Jon Moran at 609-695-3481, ext. 121.

 

 

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