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August 12, 2014

Re:    Weekly Summer Update

I. Governor Vetoes Tax Levy Exemption for Flood Insurance Premium
II.
Governor Vetoes Onerous Procedures to Privatize Public Service Contracts
III.
November Ballot Questions

Dear Mayor:

I. Governor Vetoes Tax Levy Exemption for Flood Insurance Premium

The Governor vetoed S-762/A-3328, which adds to the property tax levy cap exclusions increases in flood insurance premiums.  S-762/A-3328, which the League supported, would have permit municipalities to exclude from the 2% Property Tax Cap Levy certain increases in flood insurance premiums in the first year following changes to a federal flood insurance map.  In the second, third and fourth years following changes to the federal flood insurance maps municipalities will be able to exclude flood insurance premium increases in excess of 2%.

In his veto message, Governor Christie noted that municipalities have the “sufficient flexibility to address its needs…including through a public question to the voters for the permission to exceed the cap.”  In his veto message the Governor stated “While the overall tax burden in this State is still unacceptable high, the cap has proved an important tool on the long road to fiscal sanity.  This bill would take a step in the wrong direction, carving out yet another exception to the cap, and unnecessarily threatening to undermine what we have accomplished to slow skyrocketing property taxes.”

The Governor also stated “…my Administration has aggressively pursued grant and funding opportunities available for local governments, has undertaken numerous efforts to educate municipalities on how to apply for those opportunities, and has worked tirelessly to ensure that those benefits are disbursed as quickly as possible upon approval.  Raising property taxes for those affected households to address increases in flood insurance premiums that municipalities must pay to maintain coverage on municipal property is an additional financial burden many families may not be able to bear.”

Contact:  Lori Buckelew, 609-695-3481 x112 or lbuckelew@njslom.com

II. Governor Vetoes Onerous Procedures to Privatize Public Service Contracts

The Governor vetoed S-770/A-2873, which establishes procedures and standards regarding public service privatization contracts.  S-770/A-2873, which the League opposed, would have added many layers of review and oversight, rendering the process to privatize a municipal service burdensome and lengthy.  If the municipality passed all the hurdles to bid we were concerned that there will be limited bidders willing to bid for the project that could have potentially resulted in a loss of any savings.

As local units struggle to meet 2% levy cap, without the full effects of the management reforms and with the continued diversion of energy tax receipts, officials are forced to re-examine their budget and delivery of their services.  In order to deliver the services that residents expect and want local officials have been making structural changes not only to their budget but to their services.  S-770/A-2873 would have created such a burden on both the municipality and potential contractors that there would be limited privatization of services.

In his veto message, the Governor noted that “this bill creates an onerous and overly bureaucratic, process-laden system for privatizing government services, which will only serve to frustrate attempts by State and local officials to save taxpayer dollars.” 

Contact:  Lori Buckelew, 609-695-3481 x112 or lbuckelew@njslom.com

III. November Ballot Questions
On Monday August 4 the General Assembly gave final approval, by the required super-majority, to two proposed constitutional amendments.    These proposals now go before the voters for approval in November.

Open Space Funding
The Assembly sent to the voters a proposed constitutional amendment to dedicate corporate business taxes (CBT) for open space preservation funding.     The Senate previously approved by a super-majority passed SCR-84.  The proposed constitutional amendment will be a statewide voter referendum question on the November ballot.    Currently 4% of the CBT is dedicated to funding a number of programs within the Department of Environmental Protection (DEP ).  If approved by the voters, SCR-84 would reallocate the current CBT dedication to funding open space programs and, beginning in FY 2020, increase the amount dedicated from 4% to 6%.

Bail Reform
The General Assembly gave final approval to two bail reform bills, including a proposed constitutional amendment requiring voter approval in November.    If approved by the voters, SCR-128 would allow judges to order the pretrial detention of a person in a criminal case.

Contact: Mike Cerra, 609-695-3481x120 or mcerra@njslom.com

Very truly yours,

William G. Dressel, Jr.
Executive Director

 

 

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