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August 24, 2010

RE: Senate Action on Bills No Help For Budgets

Dear Mayor:

Yesterday in Trenton, the State Senate approved a few bills of interest to local officials. Though one of these bills implements one of the Governor’s toolkit recommendations, none of them will help municipalities cope with the 2% levy cap.

S-351, sponsored by Senators Steven V. Oroho and Stephen M. Sweeney, expands scope of review of Pension and Health Benefits Review Commission. At present most, but not all, pension and health care legislation concerning public employees is reviewed by the commission.  Under the bill, the commission would review all legislation that affects the financing, procedures, or operations of pension or health care plans or programs, including all defined benefit retirement plans or systems, defined contribution retirement plans or programs, or deferred compensation or other individual retirement account-type plans for public employees in this State, or legislation that mandates or permits public entities to pay for employee health care benefits in active service or in retirement.

The League supports this bill, which will now move over to the Assembly, where it will most likely join its companion measure, A-193, in the Assembly State Government Committee.

S-1392, sponsored by Senator Loretta Weinberg, requires PERS to train employers on enrollment requirements; requires employers to certify validity of PERS enrollment; requires assignment of investigator; clarifies penalty for providing false information to PERS.

The League opposes this bill, which would shift oversight responsibilities from the State Division of Pensions to already over-burdened local officials. S-1392 now proceeds to the Assembly, where we expect it to join its companion, A-2452, in the Assembly State Government Committee.

S-1712, sponsored by Senators Shirley K. Turner and John A. Girgenti, requires hospitals to report certain injuries to local and State police. This bill requires hospitals to report to the local law enforcement agency, as well as to the State Police, every case of a wound, burn or any other injury arising from or caused by a firearm, destructive device, explosive or weapon. Current law requires these reports to be made to either the local police or the State police.  This bill is designed to ensure that hospitals notify both in the case of such an injury.

The League supports this bill, which now moves on to the Assembly, where it will probably be referred to the Assembly Law and Public Safety Committee.

S-2208, sponsored by Senators Paul A. Sarlo and Diane B. Allen, allows certain organizations to file complaints with Council on Local Mandates in certain circumstances. Specifically, this bill allows the League and other associations of local officials to file a complaint with the Council concerning a potential unfunded mandate.  Complaints filed by these organizations must be on behalf of at least two constituent members of the organization, which must be identified in the complaint.  Currently, only the governing body or directly elected chief executive of a county or a municipality or a local board of education may file complaints with the Council. The bill also allows complaints to be filed by local fire districts, as they are creations of a municipality authorized to perform traditional municipal public safety functions of firefighting and rescue funded through a property tax, and may face circumstances constituting a State unfunded mandate.

This bill implements recommendation number 21 of Governor Chris Christie’s 33-bill package of reforms aimed at solving New Jersey's property tax crisis. Because it requires the backing of at least two constituent members, the League supports this bill. It will now go to the Assembly, where it will be referred to a Committee by Speaker Oliver.

It has now been six weeks since the Governor signed the new 2% levy cap into law. The League had asked the Governor and the Legislature to delay action on the cap until after they had agreed on management reforms and mandates relief items that would make that cap workable. Our request was ignored. As we feared, there is a danger that inertia has set in. Agreement on management reforms and mandates relief has NOT been reached.

The longer we wait for reforms and relief, the greater the likelihood that other matters will distract State level policy makers and divert their attention away from these needs.

All around the State, responsible municipal officials have begun planning their 2011 budgets. At this point, those plans MUST account for the new cap. At this point, those plans must be based on the assumption that meaningful management reforms and mandates relief initiatives will NOT be in place. At this point, those plans must also be based on the further assumption that next year’s State budget will not provide statutorily required revenue replacement funding.

Accordingly, though Mayors and governing bodies will do whatever they can to prevent negative outcomes. Under current assumptions however property taxpayers should anticipate service cuts. And local government employees should expect lay-offs.

These consequences may be unavoidable in 2011. Going forward, the situation can only improve IF serious reforms are enacted and unfunded mandates are relieved or repealed. Attention to the Binding Interest Arbitration mandate should top the list of State priorities for meaningful property tax relief.

If you have any questions on any of these bills, please contact Jon Moran at 609-695-3481, ext. 121.

Very truly yours,

William G. Dressel, Jr.
Executive Director


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