Trenton hoards money that should provide property tax relief
Published: Monday, April 16, 2012, 6:19 AM
By Star-Ledger Editorial Board
John O'Boyle/The Star-Ledger
When government argues over which bureaucrat gets to spend your tax money, it seems pointless to take sides. Everyone’s hand is in the same pocket.
But like a playground bully, New Jersey has swiped more than $3.4 billion from local municipalities over the past 10 years, robbing them of money that should be used to lower property taxes.
When utility companies string cables across the land, they pay a tax for the privilege. That tax, the energy tax, is paid to the state. It’s supposed to be passed on to the towns — but much of it isn’t. Every year, the state skims more and more off the top.
It’s not pocket change. In 2012, utilities will pay $1.1 billion in energy taxes. That’s money mayors and councils could use to pay police and firefighters, mow parklands and fill potholes.
Now, the towns want that money back.
The utility tax has been around since 1884 and, legally, it belongs to the municipalities. But, starting with Gov. Tom Kean, every governor since — Republican or Democrat — has taken a cut. In 2010, Gov. Chris Christie set a new standard by taking $271 million to fill gaping holes in the state budget.
Why is this important? Look at East Windsor. This year, East Windsor’s budget is $20 million. The township is owed $2.8 million in energy taxes.
"That’s our money," Mayor Janice Mironov says.
With that money, Mironov could cut East Windsor’s municipal tax rate by 25 percent. Or rehire some of the police and firefighters she was forced to let go to get under Christie’s 2 percent cap.
Legislators insist they had every legal right to take the money for the state budget. That doesn’t mean it was justified.
They wonder, too, if they did give it back, whether mayors would use the money to cut property taxes — or spend it on luxuries, such as rehiring laid-off workers.
That, municipal leaders say, is insulting. And hypocritical.
Look at it this way: The state government balanced its budget by skimming millions from the towns’ energy tax revenue. Then, instead of giving the energy tax money back, Christie declared a surplus and announced his plan to cut income taxes. Who’s complaining about New Jersey’s income tax?
The property tax is the most oppressive of New Jersey’s taxes. Given the choice between cutting the property tax or the income tax, we’ll vote for property tax relief every time.
For their part, municipal leaders say they’ll commit to cutting property taxes with the energy taxes. They should get that chance.