EXECUTIVE
DIRECTOR'S MESSAGE |
FROM
407 WEST
STATE STREET.....
|
|
|
The Budget and Property Tax Relief
William G. Dressel, Jr.
Executive Director
New Jersey League of Municipalities
|
As
Governor Codey presented the State's FY '06 Budget to the State Legislature last month, the State of New Jersey faced a $4 billion deficit. The Governor responded with what was reported to be one of the biggest one-year reductions in State spending in history. It included flat funding in general municipal property tax relief, but cuts in other "aid" line items. The Extraodinary Aid program was cut by $10 million and the Special Municipal Aid program suffered a $5 million reduction, for example.
According to State sources, the annual statewide property tax levy has increased over the last five years. In fact, the municipal portion of the levy increased from $3.714 billion in 2000 to $4.687 billion last year. And some say this occurred "despite unprecedented billions of dollars in state aid."
We disagree. Again, according to State sources, in FY 2001, the State provided municipalities with about $1.604 billion in general property tax relief funding. In the State's current Fiscal Year (2005), the figure is around $1.682 (which includes $2.5 million in Taxpayer Hero Grants that were appropriated, but never distributed). Though we appreciate the State's struggle to provide a little less than a 5% increase in tough budgetary times; at about half the rate of inflation, that's hardly a precedent shattering figure. If, instead, funding levels had increased at the rate of inflation, as they are supposed to do according to law, 2004 municipal property tax relief should have been over $1.7 billion.
Yet despite what has been basically flat property tax relief funding, over those
League President, Paeter A. Cantu, Mayor of Plainsboro, testifying before the Senate Budget Committee on March 16, 2005 at the Tweeter Center in Camden. |
same five years the total local property tax rate has gone from 3.003 to 3.021. And, in each of the last two years the local property tax rate has actually declined, from 3.043 in 2002 to 3.027 in 2003 to last year's 3.021.
Now, the word out of Trenton is for local officials to anticipate significant reductions in discretionary property tax relief funding. This, despite the fact that the costs of doing the public's business at the local level, here in New Jersey, increased by 3.5% last year. Though we will lobby to reinstate the Extraordinary Aid and Special Municipal Aid spending cuts, the inevitable result of this budget will be property tax increases, service cutbacks or some combination of the two. And the by-product will be an increase in New Jersey's already unprecedented over-reliance on regressive property taxes to fund essential public programs and services.
That's our fiscal illness. Now let's look for a cure. Our "primary care physicians" in the State Legislature don't seem to have one. So we've asked them for a referral to a new group of "specialists." Those we have in mind would be the delegates to a citizens' convention for property tax reform. The people of New Jersey expect the Senate and General Assembly, as well as Acting Governor Codey, to act on a property tax convention bill. They need nothing more than that. They deserve nothing less.
Editorial from New Jersey
Municipalities, Volume 82, Number 3, March
2005 |
NJLM - April 2005 From 407 West State Street
EXECUTIVE
DIRECTOR'S MESSAGE |
FROM
407 WEST
STATE STREET.....
|
|
|
The Budget and Property Tax Relief
William G. Dressel, Jr.
Executive Director
New Jersey League of Municipalities
|
As
Governor Codey presented the State's FY '06 Budget to the State Legislature last month, the State of New Jersey faced a $4 billion deficit. The Governor responded with what was reported to be one of the biggest one-year reductions in State spending in history. It included flat funding in general municipal property tax relief, but cuts in other "aid" line items. The Extraodinary Aid program was cut by $10 million and the Special Municipal Aid program suffered a $5 million reduction, for example.
According to State sources, the annual statewide property tax levy has increased over the last five years. In fact, the municipal portion of the levy increased from $3.714 billion in 2000 to $4.687 billion last year. And some say this occurred "despite unprecedented billions of dollars in state aid."
We disagree. Again, according to State sources, in FY 2001, the State provided municipalities with about $1.604 billion in general property tax relief funding. In the State's current Fiscal Year (2005), the figure is around $1.682 (which includes $2.5 million in Taxpayer Hero Grants that were appropriated, but never distributed). Though we appreciate the State's struggle to provide a little less than a 5% increase in tough budgetary times; at about half the rate of inflation, that's hardly a precedent shattering figure. If, instead, funding levels had increased at the rate of inflation, as they are supposed to do according to law, 2004 municipal property tax relief should have been over $1.7 billion.
Yet despite what has been basically flat property tax relief funding, over those
League President, Paeter A. Cantu, Mayor of Plainsboro, testifying before the Senate Budget Committee on March 16, 2005 at the Tweeter Center in Camden. |
same five years the total local property tax rate has gone from 3.003 to 3.021. And, in each of the last two years the local property tax rate has actually declined, from 3.043 in 2002 to 3.027 in 2003 to last year's 3.021.
Now, the word out of Trenton is for local officials to anticipate significant reductions in discretionary property tax relief funding. This, despite the fact that the costs of doing the public's business at the local level, here in New Jersey, increased by 3.5% last year. Though we will lobby to reinstate the Extraordinary Aid and Special Municipal Aid spending cuts, the inevitable result of this budget will be property tax increases, service cutbacks or some combination of the two. And the by-product will be an increase in New Jersey's already unprecedented over-reliance on regressive property taxes to fund essential public programs and services.
That's our fiscal illness. Now let's look for a cure. Our "primary care physicians" in the State Legislature don't seem to have one. So we've asked them for a referral to a new group of "specialists." Those we have in mind would be the delegates to a citizens' convention for property tax reform. The people of New Jersey expect the Senate and General Assembly, as well as Acting Governor Codey, to act on a property tax convention bill. They need nothing more than that. They deserve nothing less.
Editorial from New Jersey
Municipalities, Volume 82, Number 3, March
2005 |
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