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FROM 222 WEST STATE STREET
Bill Dressel, League Executive Director

 

We Need To Come
Together, To Move Ahead

Bill Dressel

A lot has been said about the Energy Tax Receipts Property Tax Relief Act, which was enacted in 1997. The original bill was sponsored by Assemblymen Paul DeGaetano and Paul Kramer, and co-sponsored by, among others, then-Assembly Members Rich Bagger, Anthony Bucco, Rose Heck, Alex DeCroce and Barbara Buono, and by Senators Peter Inverso and Joseph Kyrillos. That bi-partisan, common-sense legislation was designed to ensure fair competition in the energy market, produce consumer savings, enhance economic development and deliver reliable and increasing municipal property tax relief funding.

In order to ensure that funding, the sponsors and supporters of the Act knew that they could not count on the self-discipline of future state policy makers. They had seen (and many of them had taken part in) the annual state skims from Franchise and Gross Receipts revenues. They were sensitive to the problems these skims imposed on local budgets, and the lack of trust they created between local officials, who were promised the funding, and state officials, who failed to deliver on that promise.

Many in the Legislature at that time had served, or were serving, in municipal government. And all of them were aware of the frustration of local officials in their districts. Neither the skims, nor this response to them, were partisan in nature. It had just proved too easy for state budget makers to ignore the requirements of permanent statute, and to use these municipal revenues to balance the State Budget.

Accordingly, the “poison pill” was included in the bill that passed the Assembly 77-0-3, winning the bi-partisan votes of, among others, then-Assembly Members Diane Allen, Kip Bateman, James Holzapfel, Kevin O’Toole, Nellie Pou, Bob Smith, Shirley Turner and Loretta Weinberg, as well as incumbent Assembly Members Michael Patrick Carroll, Albert Coutinho, Jerry Green, Lou Greenwald, Reed Gusciora, David Russo and John Wisniewski. It then passed the Senate 38-1-1, with Senators Jerry Cardinale, Richard J. Codey, Ray Lesniak, Ron Rice and Bob Singer all on board.

For five years, thereafter, the state honored the letter and spirit of the Act. In fact, the letter of the law has been respected in every budget, to date, in part, perhaps because of that “poison pill.” But, since then, the spirit of has been violated by the shift of funds from CMPTRA to the Energy Tax, allowing the state to avoid that bitter pill. It has again proved too easy for state budget makers to circumvent the requirements of permanent statute and tap this money for state purposes.

Only a return to the bi-partisanship of 1997 can remedy the problems these skims now impose on local budgets, and the lack of trust they create between the local officials and state officials. Our Mayors are united in this.

 

Editorial from New Jersey Municipalities, Volume 89, Number 5, May 2012

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