March 21, 2014
RE: President Walters Delivers League Outlook on Governor’s Budget Proposal
On Tuesday in Trenton, League of Municipalities’ President, Mayor Suzanne Walters of Stone Harbor Borough, addressed the Assembly Budget Committee on the Governor’s Budget proposal. (You can access a copy of Mayor Walters statement at http://www.njslom.org/testimony/MAYOR-WALTERS-ASSEMBLY-BUDGET-TESTIMONY-031814.pdf.) On Wednesday in Westampton, President Walters made the same points before the Senate Budget and Appropriations Committee. Over the next few months, the Legislature will study the proposal, leading to the adoption of a State spending plan for the Fiscal Year beginning July 1, 2014.
Focusing on the impact of State actions on local property taxes, Mayor Walters reminded Committee members, “…that Mayors working with local governing bodies over the past six years deserve credit for making the tough decisions in tough times. We have pruned budgets, pursued savings, engaged in tough negotiations, reduced the workforce, shared services, cut spending, applied best practices, emptied reserve accounts and deferred investments. We did this as property values declined, tax appeals increased, development and economic activity stalled, employment slumped and property tax relief funding was diverted to the State budget. “
Mayor Walters highlighted the importance of timely action by the Legislature to make permanent the 2% cap on interest arbitration award, which expires on April 1. “As the first order of business, we call on State policymakers to take action to ensure that the limit on police and fire contract arbitration awards remains in place. Unless the Legislature acts to extend the April 1 ‘sunset’ of the limitation on arbitrator awards for police and fire personnel … our taxpayers will lose that essential protection. Any awards in excess of that limit would immediately threaten funding for all other municipal services. And, in the not-too-distant future, such awards could force local budget makers to reduce public safety staffing levels, as fewer local employees steadily take home higher percentages of local funds.”
Mayor Walters urged the Legislature to restore all the property tax relief funding that is due to municipalities, “In recent years, legislators on both sides of the aisle have recognized that the decision to redirect municipal revenues for State use has been a major contributor to increases in local property taxes. We are grateful for the past support that members of this committee have given to this effort. Thanks to your leadership, bills that would gradually begin to rededicate funding for local property tax relief have advanced. Respectfully, we ask that you again consider to at least begin to restore the $331 million, in this budget.”
On this issue, we want to thank Wharton Borough Administrator Jon Rheinhardt for helping to illustrate the impact of Energy Tax/Consolidated Municipal Property Tax Relief Aid underfunding on municipal budgets and property tax relief. On our website, we have posted Mr. Rheinhardt’s power point presentation on the history of New Jersey Energy Tax policy and the growing gap between the level of property tax relief required by State law and the amount actually distributed. You can access that at http://www.njslom.org/ETR/State-Aid-Detailed-2013.pdf. He has also shared with us a funding gap calculator that you can use to determine how the gap has affected your municipal budget. You can access that at http://www.njslom.org/ETR/2014-ETR-Impact-Calculation.xls. (Once you have downloaded the calculator, ask your Chief Financial Officer to enter, in Column C, the amounts of combined ETR and CMPTRA that was distributed to your municipality in each year from 2001 to the present. The calculator will do the rest.)
Mayor Walters also express support for the proposed increase in Transitional Assistance, support for level funding for the Open Space PILOT funding, which provides level relief for towns in 2014, and concerns with the proposed change in the business-to-business sales tax rate in Urban Enterprise Zones.
We will keep you posted on all State budget developments in the weeks and months ahead. 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.