This month, the State Legislature will begin to consider Governor Corzine’s most recent budget proposal, and two things are apparent. First, New Jersey has the opportunity to make a clean break with the past—a past that has relied on one-shot revenues, fiscal gimmicks and dubious debt. And second, property tax reform just isn’t as important in Trenton as we may have been led to believe.
Both sides of the aisle agree that debt is dragging us down. Back in January, at our annual Mayors’ Legislative Day, local officials were treated to the Governor’s powerful point-by-point presentation, detailing the state’s fiscal crisis. By highlighting the state’s $30 billion bonded indebtedness, our $25 billion unfunded pension liability and our $58 billion post-retirement medical liability, he provided deep insight into the key legislative and budgetary priority for 2008—the Financial Restructuring and Debt Reduction Initiative.
But the plan, which includes a budget that freezes spending at the current year’s level and the controversial toll road asset monetization proposal, is not without critics or consequences. Acknowledging this, the Governor has invited opponents of the plan to propose an alternative.
When briefed on the plan, our League President, Mayor Robert Bowser and other members of our Executive Board raised important questions. The Governor’s Chief of Staff responded in writing, and we have posted the answers on our website. We have also posted the state commissioned study that estimates the effects of the proposed toll increases on local road usage. And our Heavy Truck Task Force is currently looking into that potentially serious consequence.
But local roads and toll payers are not the only potential victims of the plan. This budget proposal could mark the seventh straight year in which the New Jersey Legislature adopts an Appropriations Act that under-funds key municipal property tax relief programs (CMPTRA and Energy Taxes). State statutes require annual inflationary adjustments in those programs. For five years, funding remained flat. Then last year, municipal property tax relief funding finally increased—by 2 percent. By adopting these budgets, our local property taxpayers have been denied over $283.7 million of relief, over the past years. That money went to fund other state priorities - priorities other than property tax relief.
We agree with the Governor. Now is the time for transformational change.
Editorial from New Jersey
Municipalities, Volume 85, Number 2, February 2008