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July 1, 2011

Re:    Governor Signs State Budget After Cutting $900 Million In Spending

Dear Mayor:

Yesterday in Trenton, Governor Christie cut $900 million in spending from the FY 12 State Budget bill (S-4000), which the Legislature had passed on Wednesday. With those cuts in place, the Governor signed into law a budget that:

  • Increases state aid to school districts by $850 million over last year. (This commitment to education includes the Governor’s initial $250 million increase for all school districts, meeting the Supreme Court’s mandate by providing an additional $450 million to the Abbott districts, and an additional $150 million for non-Abbott districts.);
  • Doubles the Homestead Benefit to provide property tax relief for New Jersey families;
  • Increases and secures funding for New Jersey hospitals by $20 million;
  • Provides full funding for healthcare to low-income earners and the uninsured through Federally Qualified Health Centers;
  • Provides $180 million in targeted tax cuts and incentives to grow the economy and create jobs;
  • Fulfills New Jersey’s commitment to make the state’s pension fund payment;
  • Doesn’t raise taxes on individuals and job creators at a time when New Jerseyans are already subject to one of the highest state income tax rates in the nation and our neighbor, New York, is reducing its tax burden; and
  • Preserves critical spending for senior and disabled prescription aid.

The cuts, produced by vetoes to hundreds of line items, include the following, which would:

  • Eliminate the $50 million Municipal Public Safety Aid Program, which was meant to help municipalities with higher than average tax rates and/or lower than average property values, which have experienced an increase in crime rates;
  • Reduce Transitional Aid, which is meant to help municipalities deal with extraordinary difficulties, from $149 million to $10 million;
  • Redirect to the State’s General Fund about $49 million from Sales Taxes collected in and promised to New Jersey’s Urban Enterprise Zone municipalities for economic redevelopment;
  • Remove the provision that would have based Division of Local Government Services (DLGS) “Best Practices” scoring on a municipality’s compliance with standards included on last year’s inventory; and
  • Cut per capita library aid in half, to $3.7 million.

 

Once again, it seems that municipalities are being asked to sacrifice more than their fair share. Since the Governor’s line item vetoes have resulted in the State anticipating a $640 million surplus – the largest cushion in the past decade – we will ask the Governor and Legislature to work together towards a supplemental appropriation to help some of the most fiscally stressed municipalities through these trying times.

At this point, we will focus our efforts on reinstating funding for the Transitional Aid program. The $149 million appropriation for this purpose (down from $159 million in FY ’11) was part of the Governor’s original budget proposal. These funds are only available to municipalities anticipating difficulties making payments toward nondiscretionary or critical obligations including, but not limited to, debt service, contractual obligations, and public safety payroll. 

Please contact your State Legislators and the Governor’s office. Ask them to join together to address the needs of the citizens and property tax payers living in municipalities, struggling to recover from especially difficult circumstances.   

If you have any questions on any of these items, please contact Jon Moran at 609-695-3481, ext. 121 or jmoran@njslom.com.

Very truly yours,

William G. Dressel, Jr.
Executive Director

 

 

 

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