May 8, 2012
Re: S-1914 Requires User Fees Be Included in 2% Cap
The League of Municipalities has reviewed and opposes S-1914, which requires certain user fees for the provision of traditional municipal services to be included within the 2% municipal and county property tax levy cap. For more detail information on S-1914 please see our May 4 Dear Mayor letter.
The League opposes S-1914 for several reasons. First the bill only affects municipalities. User fees for traditional county services and traditional school services would not be included in any cap calculations. According to the bill statement, S-1914 is “intended to help insulate local taxpayers from efforts by municipal officials to remove the cost of providing certain traditional municipal services from under the 2% municipal and county property tax levy cap by shifting to a “user fee” based funding system for traditional municipal services that were previously included the local budget prior to enactment of this bill.” User fees enacted by the county and school districts, however, are not addressed in the legislation. The local taxpayer is not only responsible to bear the cost of the county and school levy but is also the recipient of those services.
Secondly, the definition of “traditional municipal services’ is open-ended, leaving municipalities and State regulators unsure on its application and, therefore, unable to properly plan for future years. At times it is appropriate to fund some services by user fees, especially those services for which a recipient and a cost can be clearly and accurately calculated.
Further, the bill raises concerns regarding implementation. Local budgets, in compliance with the levy cap, that have been introduced and await review by the Division of Local Government Services could become in violation of a law that was not known when the municipality developed and introduced its budget.
A copy of the bill is available at: http://www.njslom.org/documents/s1914.pdf
A copy of the resolution for your consideration can be found at as a
PDF – www.njslom.org/resolutions/s_1914_resolution.pdf
Word – www.njslom.org/resolutions/s_1914_resolutions.doc
User fees are not a new budgeting tool; nor is there a statewide effort by municipalities to circumvent the 2% levy cap. All local units of local government enact user fees to recapture some of the costs for services provided in their community. As local units struggle to meet 2% levy cap, without the full effects of the management reforms and the continued diversion of energy receipt taxes, officials are forced to re-examine their budget and priorities. In order to deliver the services that their residents expect and want local officials have been making structural changes to their budget, including how programs are funded. Municipalities must continue to have the flexibility to meet these demands not have their hands tied further by legislation.
If you have any questions or concerns, please contact Lori Buckelew at 609-695-3481 ext 112 or firstname.lastname@example.org
Very truly yours,
William G. Dressel, Jr.