March 3, 2009
Re: 4% Tax Levy Cap
I am hearing from a number of areas that the 4% Tax Levy Cap is creating great problems for Local Government. The decline in development has resulted in significant decline in the Roll back taxes, as well as, Added and Omitted Assessment which, in the past, have been used to develop surplus. Those surplus funds were then appropriated in the operating budget to stabilize property tax levy.
This loss of revenue means you begin the year in a deficit position. I am also hearing from a number of you that your tax base is constricting as the housing and commercial markets decline. Adding to that pain is are the defense and/or loss of tax appeals. A constricted tax base means your levy just to stay even must increase.
Some of you have expressed concern about the cost of health benefits experience rated and have been increasing faster than the 4%. Finally, many of you have imbedded contract obligations which will cause you to increase your operating costs.
These issues are not small matters. They are forcing you to reduce your staffing levels, postpone maintenance, eliminate programs and defer payments programs. In spite of these efforts I am receiving word that many of you are experiencing problems that will not let you live with the Tax Levy Cap. The only answer appears to be an application to the Local Finance Board seeking a Waiver.
The Governor has publicly proclaimed his desire that Local Finance Board not grant any Waivers. This blanket statement does not take into consideration your individual concerns, nor the dynamics of running a Local Government. In light of this I would like to ask you to respond to the enclosed survey (WORD / PDF).
The response to these questions will help me place things in perspective and provide valuable information to the Legislature.
Please fax your responses back to 609-695-0151, c/o Ms. Shirley Cade. Thank you for responding quickly.
Very truly yours,