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February 25, 2011

Re: State Budget Week in Review and Call For Action

Dear Mayor:

It will never serve as a sound bite on the evening news. But it is amazing what can be accomplished by public servants who are willing to work together to tackle the issues that trouble themselves and their neighbors.

Being used to such teamwork, you deeply appreciated the size and the number of the problems that face the Governor and the Legislature, as they struggled to craft a balanced budget for New Jersey’s next fiscal year.  Through the League you help each other confront the most serious economic crisis in our lifetimes in countless ways.

In 2010, 566 municipalities saw the value of collective action and again chose to advance themselves and their colleagues by joining the League.  This year municipalities are again stepping up and choosing to work together through the League to achieve success in the Legislative arena.

On Tuesday, Governor Christie proposed a budget for the State’s next Fiscal Year. Thanks to the early efforts of East Windsor Mayor and League Second Vice-President Janice Mironov and her Statutory Funding Compliance Committee, the Governor’s proposal will help to stop the bleeding caused by State cuts in vital municipal revenue replacement funding.

  • Combined Energy Tax and CMPTRA funding will equal last year’s distribution to every municipality in the State; and
  • Open Space Payments In Lieu Of Taxes (PILOTs), which had been slated for ‘phase-out’ by the Administration, will also be held level for the effected municipalities, which hold these lands in their natural state for the benefit of all.

These are significant plusses for all of us, who face unprecedented tests in this budget year. But more needs to be done.

The Governor’s proposal would also cut $10 million from the Transitional Aid Program, which is meant to help municipalities pull through extraordinary hardships. Never has such assistance been needed more. Now is not the time for such a cut. We intend to work with State Legislators, as they move towards adoption of the State’s Appropriations Act over the next four months.

The budget proposal also would have the State divert sales tax revenues collected in, and intended to be returned to, our State’s Urban Enterprise Zone municipalities. For the second consecutive year, the Treasurer wants to use these moneys to balance his budget. This would cost local property taxpayers an estimated $92.6 million in FY 2012.

Then, on Thursday, the Treasurer released a report, prepared by a paid consultant, which recommends the termination of the UEZ program. And the Administration has indicated that it intends to implement this recommendation by June 30 of this year.

Just as Mayors from all around New Jersey joined their rural colleagues to protect vital PILOT funding, we will all need to join our Urban Enterprise Zone partners, as this debate progresses.

Those will be our priorities for this year’s State Budget. But for the longer term, we need to end the State’s reliance on local revenues to balance its budget. The State needs to ‘phase in’ compliance with statutes that require annual inflationary adjustments in Energy Tax and CMPTRA funding. Even the proposed level funding of those programs reflects a little sleight of hand. The Energy Tax distribution meets the letter of the law, but only because the Treasurer plans to subtract funds from CMPTRA and add the total to the Energy Tax.

Neither of these revenue funds were ever intended for State use. But for years, they have been diverted. Now, a percentage will only be distributed on the condition that municipalities satisfy State bureaucracies by completion of a Best Practices Inventory.

The League Executive Board joins together in urging you to stay active with the League.  Join the Legislative Committee.  Register at the League web site to receive e-bulletins. Then be sure to read and respond; taking action based on the content of those e-bulletins.

Acting in concert through the League, you can successfully join with other municipal officials offering a voice of reason and practicality to effectively impact the debate on the issues facing our State and our communities.

Thank you for all you do for the people of our State and for your colleagues, who serve in local government. If you want to get more involved in our legislative policy development and advocacy efforts, please contact our Executive Director Bill Dressel at bdressel@njslom.com

Very truly yours,

 

Hon. Chuck Chiarello,
President, NJLM and Mayor, Buena Vista Township

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