March 3, 2011
Re: URGENT - Urging for the Exemption for Reserve for Uncollected Taxes
As you are aware, when the new 2% cap was signed into law, the exemption for the Reserved for Uncollected Taxes was eliminated. In our December 14 “Dear Mayor” letter, we advised you that Assemblymen McKeon and Burzichelli introduced A-3603 to permit a municipality to exclude any increase in the Reserved for Uncollected Taxes in excess of 2% from the cap calculation. Senators Sarlo and Gordon have introduced the companion, S-2588.
We need your help. The Reserve for Uncollected Taxes is a technical issue that can severely impact your budget and we need to let Governor Christie and legislators know how critical this exemption is to your budget. Due to myriad factors beyond local control, the actual collections never equal the total local levy. This is especially true during an economic downturn, when unemployment soars and property values plummet. These, in turn, cause an increase in tax appeals, which the municipality must defend, and which subject the municipal budget to further losses, when successful.
In the midst of preparing your municipal budget, you know that without the exemption municipalities will be forced to further cut other line items, in order to meet the 2% tax levy cap. You have little flexibility in setting your rate of Reserve, which is mandated in order to guarantee the schools, special districts and your county 100% of the amount they levy. Inevitably, this will cause further pressures on the municipal budget, resulting in cuts to services and personnel.
We urge you to adopt the sample resolution calling on the State Legislature and Governor to exempt the Reserve for Uncollected Taxes from the 2% cap.
If you have any questions or need additional information please do not hesitate to contact Lori Buckelew at firstname.lastname@example.org or 609-695-3481 x112. A copy of a resolution can be found at www.njslom.com/dearmay.html
Very truly yours,
William G. Dressel, Jr.