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March 15, 2011

RE: League President Addresses Senate Budget and Appropriations Committee Discusses Energy Tax, Tax Appeals, and Reserve for Uncollected Taxes In Meeting with State Treasurer

Dear Mayor: 

This morning, in Gloucester Township, League President, Mayor Chuck Chiarello of Buena Vista Township, appeared before the Senate Budget and Appropriations Committee to present the municipal perspective on Governor Christie’s proposed State spending plan for FY 2012.

Mayor Chiarello told the Senators, “Giving municipal property taxpayers all the relief they have coming to them needs to be a part of ‘the new normal.’

“The Governor’s budget proposal for the State’s next Fiscal Year provides that every municipality in New Jersey would be able to receive the same amount of general property tax relief funding next year, as it is getting in the current State budget. That’s a step in the right direction. And we are relieved. But I would be remiss in failing to note it is less than our property taxpayers should have coming to them.”

Building on the work of our Statutory Funding Compliance Committee, chaired by League Second Vice-President and East Windsor Mayor Janice Mironov, President Chiarello reminded the Legislators of the State’s history of diverting dedicated municipal property tax relief funding – the Energy Tax and CMPTRA – to State purposes. Mayor Chiarello said, “If actual State revenue receipts exceed current anticipations, we ask the State to reduce its reliance on Energy taxes, which are supposed to be used for property tax relief, and to increase the distribution to municipalities, as required by the statutes.”

Noting the proposed cut in Transitional Aid and the proposed denial of locally generated sales tax revenues to Urban Enterprise Zone municipalities (for the second straight year), the League President stated, “Never has such assistance been needed more. Now is not the time for such cuts. We want to work with you, on these matters, as you move towards adoption of the State’s Appropriations Act over the next three months.”

Mayor Chiarello commented on the problems created by the new 2% levy cap, coupled with the State’s failure to deliver on the promised ‘toolkit’ management reforms. He urged fast action on pension and benefits reforms, and asked for consideration of the problems caused by tax appeals and the reserve for uncollected taxes.
Then, this afternoon in Trenton, Mayor Chiarello presented, to State Treasurer Andrew Sidamon-Eristoff, the League’s case for progress towards a full distribution of Energy Tax Receipts to their intended municipal recipients. He, further, explained some of the budgetary problems that the new cap has worsened, including the reserve for uncollected taxes and the tax appeal issue.

We will follow up on these matters with the Administration and the Legislators and keep you posted on all developments. In the meantime, we urge you to contact your own Legislators on the matters that have been highlighted by Mayor Chiarello. If you have any questions, contact Jon Moran at 609-695-3481, ext. 121.

Very truly yours,

William G. Dressel, Jr.
Executive Director


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