Good morning Chairman Sarlo and Members of the Committee. Thank you for giving me this opportunity to present the municipal perspective on Governor Christie’s budget proposal.
We know how difficult your job is this year. Municipal officials expected deep cuts. But we did not anticipate the severity of the Energy Tax cuts. While this proposal meets the letter of the law, it clearly violates the property tax relief spirit of the Energy Tax statute. Further, the Division of Local Government Services has advised us that the State will reduce aid payments to those municipalities that use formula aid reductions as an add-on to the levy cap calculation. In other words, local officials, struggling to do the best for their citizens in an incredibly difficult year, will be punished for complying with State levy cap law. And that punishment will be felt by those citizens.
There is no good way out of an $11.2 billion budget hole. But the best way will inevitably involve broadly shared sacrifices. We are braced to do our part, recognizing that our property taxpayers need to be insulated, as much as possible, from the impact of those sacrifices. For the sake of those taxpayers, a 20% cut in property tax relief funding must be accompanied by real reforms and immediate and significant mandates relief.
Accordingly, we thank Governor Christie for his effort to provide local officials with meaningful tools to limit the, otherwise devastating, impact of the cuts. Coupled with next month’s report by Lieutenant Governor Guadagno’s Red Tape Review Group, and combined with the Senate’s bipartisan pension and benefit reforms, they can represent real progress. We urge you to act on binding arbitration reform, civil service reform and immediate and significant mandates relief BEFORE you adopt a budget containing further drastic property tax relief funding cuts. Legislative action on the helpful items in the Governor’s ‘tool kit’ and on mandates relief cannot wait until after this budget is put to rest.
The Governor has promised to call for a Citizens Convention for Property Tax Reform, if the problem is not solved in his first two years in office. Cuts and caps alone will not solve the problem. A better understanding of the importance of local government programs and services to the quality of life in New Jersey will demonstrate the need for a more thoughtful and thorough response.
We thank you, again, for your consideration. Be assured that the League stands ready to assist this Committee in any way we can, as you grapple with our current crisis.