Though you will read this after the fact, we write in anticipation of Governor Christie’s first State Budget message on March 16. But we already know what to expect in terms of municipal property tax relief funding.
The Governor told us to prepare for the worst, when he addressed over 200 local leaders at our annual Mayors’ Legislative Day, in February.
After taking action to close the state’s current year $1.2 billion budget gap, the Governor was “looking forward” to an $8 to $12 billion gap for the next Fiscal Year. He told us that our tax relief funding would be reduced in his proposed budget, in order to help bridge that chasm.
Last year’s municipal property tax relief losses totaled about $56 million, which, when combined with 2008’s $154 million, equaled about a 10 percent reduction from the previous year’s totals. That followed years of “flat funding,” despite state laws requiring annual inflationary adjustments.
The lion’s share of that funding is not “State Aid” to municipal budgets, though folks in Trenton like to think it is. In fact, most of the Consolidated Municipal Property Tax Relief Act (CMPTRA) and all of the Energy Tax Property Tax Relief (Energy Tax) funding is revenue replacement funding. It is supposed to replace revenues that were originally collected by municipalities for local use. They delivered municipal property tax relief for a long time, before various “reforms” took them away from our cities, towns, townships, boroughs and villages—always accompanied by the solemn statutory vow that we would be “held harmless.” And, again, pursuant to a ten year old state law, which has long been honored more in the breach than in the observance, CMPTRA and the Energy Tax are supposed to be annually adjusted to account for the effects of inflation.
Still, as we have stated many times, there are other ways, besides compliance with its own laws, for the state to help us deliver property tax relief. And chief among them is by providing immediate and significant mandates relief.
We are confident that an Administration and a Legislature dedicated to property tax relief will work on that over the coming months. But it wouldn’t hurt to remind them.
Editorial from New Jersey
Municipalities, Volume 87, Number 4, April 2010