N.J. should stop diverting tax relief money from municipalities
Published: Wednesday, July 18, 2012, 6:12 AM
Times of Trenton on NJ.com
By Bill Dressel
This year, as never before, under the leadership of East Windsor Mayor and League of Municipalities First Vice President Janice Mironov, New Jersey mayors united in an effort to end the state’s chronic dependence on municipal property-tax relief revenues.
Thanks to the efforts of local officials all around New Jersey, and the state officials who recognize and appreciate their service, we progressed ever closer to recovering this vital municipal property-tax funding.
For years, instead of being spent on local programs and services and used to offset property taxes, the money has been spent as successive legislatures and administrations have seen fit. We don’t doubt that it was put to good use and spent on good programs, but they are not the uses intended in the original laws.
We realize that the municipal property-tax relief distribution laws are not self-executing and that the state Legislature has the power to avoid, if necessary, its statutory obligation to distribute these revenues to local governments in its annual appropriations act; the state needs to have that ability in order to deal with emergencies and crises that may occur and to balance its budget.
The state, however, should not exercise that option automatically. It should be the exception. Instead, going back over a number of administrations and legislatures, it has become the rule. By the state’s consistent failure to meet its statutory obligations, municipal property taxpayers have been denied the relief to which they are statutorily entitled.
The cumulative impact of years of underfunding has left property taxpayers with greater burdens and many municipalities with unmet needs. Whether a municipality’s needs relate to deferred investments in local infrastructure, the loss of public safety personnel, dangerously low fund balances or any other local need, local elected officials are in the best position to decide. Further, these property-tax relief monies were always intended to fund local programs and services.
A2921/S1900 would phase in, over five years, the restoration of $331 million in municipal property-tax relief funding. Municipalities had sacrificed that $331 million in state fiscal years 2009, 2010 and 2011 to support the state’s budget in those difficult years.
The bills were introduced, supported and approved by legislators who acknowledged that this local property-tax relief funding would have allowed mayors to provide their citizens with real property-tax relief this year. The bills, which garnered bipartisan support in both houses, would have moved the state closer to compliance with the letter and intent of the 1999 law governing distribution of funds deposited in the Energy Tax Receipts Property Tax Relief (ETR) account and the Consolidated Municipal Property Tax Relief Aid (CMPTRA) program.
We thank and commend the long list of sponsors, including Sen. Paul Sarlo (D-Wood-Ridge) and Assemblyman Troy Singleton (D-Mount Laurel), who championed this cause, as well as Senate President Stephen Sweeney (D-West Deptford) and Speaker Sheila Oliver (D-East Orange), who expedited the legislation to provide immediate property-tax relief.
Support for the bills came from mayors from all around New Jersey. North, South and Central Jersey Republicans, Democrats and independents from cities, suburbs and rural communities all lost property-tax relief revenue in FYs 2009, 2010 and 2011. And all would gain property-tax relief resources from A2921/S1900. On behalf of mayors from all around our Garden State, and on behalf of the citizens they serve, we urged Gov. Chris Christie to approve the initiative. We also offered to meet with the governor or his staff to address any questions or concerns they may have had with the bill.
Instead, referring to state budget concerns, the governor has vetoed the bill. As a result, this year, as in the past, ETR and CMPTRA dollars will again be used to support state spending. Having come this far, New Jersey mayors cannot stop now. We intend to continue to work with our legislative partners when the Legislature reconvenes. And, as the administration sets its priorities, we hope that providing local property-tax relief dollars to towns will finally be given the attention it deserves.
The diversion of municipal resources to cover state spending needs to end. We call on the governor and the Legislature to provide mayors with this important tool, which was always meant to relieve the worst property-tax burden in the nation, borne, for too long, by the people of New Jersey.