July 21, 2011
RE: Statements of "State Aid" Posted
The State’s Division of Local Government Services (DLGS) has released and posted 2011 Statements of “State Aid” for all calendar year municipalities and those transitioning to calendar year budgeting. Statements for municipalities budgeting on the State Fiscal Year will be made available later. For its own purposes, the State’s policy is to classify as “State Aid” revenue replacement funding such as Energy Tax, CMPTRA and Open Space PILOT dollars. These programs are specifically intended to protect local budgets from revenue losses that were caused by State tax policy changes over the years. They do not make things better for local property taxpayers, as the term “Aid” may imply. They are intended only to keep things from getting worse. If they were ever to be fully funded, they would accomplish that limited purpose.
The DLGS Statement, which depicts “State Aid” on a per parcel basis, must either be printed on your municipality's property tax bill or reproduced and included as an insert with the tax bill sent to property owners.
Your municipality’s Statement of “State Aid” can be viewed and down-loaded at
You might also consider computing the amount of Energy Tax and CMPTRA dollars that your citizens should have received, but that have, instead, been diverted for State spending programs. Wharton Borough Administrator and CFO Jon Rheinhardt has developed a spreadsheet that can be used to calculate your municipality’s annual and 10-year aggregate losses. Based on that, you can determine what your taxpayers should have received in prior years, and would be receiving this year, if the State complied with the aggregate funding requirements every year, and if it distributed to your municipality the same proportion of the total that your taxpayers originally received in 2001.
If you have access to Microsoft Excel software, you can open that spreadsheet at http://www.njslom.org/documents/ETR-Impact-Calculation.xls. The numbers currently depicted on the spreadsheet show Wharton’s actual Energy Tax and CMPTRA receipts, the statutorily required amounts and the differences. If your CFO will enter your municipality’s actual annual receipts, in column c, the program will complete the calculations and show your annual and 10-year losses.
You can use this resource to compute the amount of relief that your property taxpayers have provided, from these sources, to the State. And, if you so choose, your CFO can compute this on a per parcel basis, and you can include that information in your tax bills, as well.
In addition to that, and for your convenience, the League asked South Brunswick CFO and Deputy Manager Joe Monzo to develop a tool that all municipalities could use to depict, for your taxpayers and the media, the division of property taxes among your schools, your county and your municipal budget. With the assistance of William Freund of CF Associates, that is now available for your use. We have posted the template on our website. The link address is http://www.njslom.org/2010-property-taxes.xls. Just click on the link and follow the simple instructions. We hope you find this tool useful.
DLGS has also reminded Tax Collectors that State law prescribes procedure for handling payments when tax bills are sent out late. This year’s delay in getting the bills out was due to the State’s inability to compute the new school aid numbers, in a timely manner. This delay will impact municipalities with reductions in interest and add an expense, if you did estimated tax bills. We know that many municipalities may have been forced to do estimated bills, because of cash flow needs.
N.J.S.A. 54:4-66.3d provides that third quarter property taxes shall not be subject to interest until the later of: August 1; or, the ten day grace period, as authorized by a resolution of the governing body (N.J.S.A. 54:4-67); or the twenty-fifth calendar day after the tax bills or estimated tax bills for the third quarter were mailed.
In addition, the tax bills or estimated tax bills shall contain a notice specifying the date on which interest will begin to accrue back to August 1. This notice must either be on the tax bill itself, or enclosed as an insert with the tax bill, to inform the taxpayer of the deadline for the interest-free period.
If you have any questions, please contact Jon Moran at 609-695-3481, ext. 121 or email@example.com.
Very truly yours,
William G. Dressel, Jr.