January 13, 2011
Re: Mayors Respond to 12th Annual League Survey
For the 12th consecutive year, over two hundred mayors offered their views on several major policy areas in response to the League’s Annual Legislative Priority Survey. Their responses to specific issues provide direction and will assist the League Executive Board and staff during what could be a critical year for municipalities and property taxes.
Property taxes, the 2% cap, sharing services, and the costs that affect taxes are foremost on Mayors’ minds as they are preparing their 2011 budget. The 2011 budget is the first municipal budget subject to the 2% cap. Accordingly, when asked what action(s) they will likely take to meet the 2% cap the Mayors ranked them as follows:
1. Share Services
2. Increase Fees
3. Reduce Services
4. Concessions from Employees
5. Deferral of Capital Improvements
6. Increased Health Care contribution from employees
8. Reduce staff from Full-time to Part-time
10. Eliminate Services
11. Salary givebacks from employees (tie)
11. One-time revenue (i.e. sale of public property) (tie)
13. Examine Consolidation with another municipality
14 Initiate Accelerated Tax Sale
Sharing services was the top on the list, the Mayors also ranked the obstacles to entering a shared service or consolidation of services with a neighboring community as follows:
1. Savings not immediately realized
2. State laws and/or regulations (tie)
2. Implementation cost (tie)
4. Cost related to feasibility study (tie)
4. Demographics (tie)
5. Local Politics
Still the number one local budget stressor is state mandates, closely followed by the State under-funding of revenue replacement programs such as CMPTRA and Energy Receipt Tax. Personnel expenses, such as health benefits cost and pension cost, round out the top three.
While municipalities are unable to control their annual state pension bill they are able to control other personnel cost such as longevity and health benefits. In May, Governor Christie signed a series of pension and health benefits reforms. One of the reforms required employees to contribute 1.5% of their base salary towards their health benefits. This reform took effect on May 21, 2010 or at the expiration of the collective barging agreement. 39% of the Mayors noted that they require their employees to contribute more than 1.5% of their base salary towards their health benefits premiums.
In regards to longevity, longevity is offered to PERS employees in 63% of the responding municipalities; and in 60% to PFRS employees. In both instances, the longevity is based on a fix dollar amount by 35% of the respondents vs. a percentage of salary by 65%.
Another state mandate that impacts the municipal budget is COAH. A recent Appellate Division decision struck down the 3rd round regulations and ordered COAH to revert back to its 2nd round methodology. If COAH is not abolished, by legislation, 2/3 of the Mayors would like a revision of a “growth share” methodology vs. a return to the 2nd round methodology.
The Mayors also ranked the impediments to addressing property tax relief as follows:
1. Inability of Governor and State Legislature to reach a political consensus
2. The current recessionary economy
3. Political strength of special interest and unions
4. Too many local governments
and 82% stated they support a citizens’ convention to exclusively address property taxes.
In recent months, the delivery of emergency medical services has been debate in both the Assembly and Senate. Legislation has been introduced that will change the delivery of emergency medical services. In light of the recent discussions, we asked exactly how municipalities are delivering EMS to their residents. 45% use volunteers, 24% share services, 11% have a part-time paid department and volunteers and 8% have a full time paid department. Interestingly 12% listed “other” and noted that EMS is provided by giving a local hospital a stipend for daytime coverage, using paid firefighters as secondary responders and contracting out with private companies.
In 2006, the League established a 13 member Mayors Committee for a Green Future to lead and inspire New Jersey’s sustainability agenda. The committee has been promoting greening New Jersey municipalities through education, outreach, leadership and support for municipal programs and practices that protect the environment and contribute to a better New Jersey overall. Our efforts have begun to pay off; over 64% of the Mayors noted that they have implemented green technology. Municipalities have implemented cut and leave grass clipping programs; converted to natural gas; installed solar panels and amended zoning ordinance to become more solar friendly; established rain gardens; created recycling banks; and installed high efficiency lighting and LEDs.
Thank you for participating in this survey. Your response helps guide the League Executive Board and staff during what could prove to be a critical year for local government and property taxes in our Garden State.
We also thank you for stopping by the Mayors’ Information Center during the annual conference. The Mayors’ Information Center is continuing to grow and is becoming a favorite stop among Mayors on the convention floor. We would like to thank Ikon Office Solutions/A Ricoh Company for once again providing fax and copy services for the Mayors and we would like to welcome and thank Verizon for providing internet access. We look forward to seeing you again next year.
Very truly yours,
William G. Dressel, Jr.