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December 1, 2009

RE: Property Tax Relief Funding Deferred Permanent Cut Considered

Dear Mayor:

Today, the Division of Local Government Services (DLGS) announced that the December 1 Consolidated Municipal Property Tax Relief Act (CMPTRA) payment will not be made as scheduled. Further, DLGS stated that the over $20 million payment “is being withheld at this time as the Governor, Treasurer and the executive branch agencies develop a plan for maintaining the constitutionally required balance in the State budget. ... Municipalities will receive guidance from the Division of Local Government Services once a final decision has been made on the CMPTRA withholding.”

This action is being taken to help close the State’s $800 million budget gap.

The withholding, however, will not effect December 1 Energy Tax Receipts Property Tax Relief (ETR) distributions, which will be made on time and in full.

Local budgets were carefully crafted and balanced assuming that the State would honor its commitment to a certain level of property tax funding. That level had already been reduced twice within the last twelve months – first, in January, when State revenue projections were not met, and second, in July, when the State’s current budget imposed further cuts.

This funding was included in the State’s ‘final’ budget for the current Fiscal Year. The funding was listed as miscellaneous revenue in your budget certified by DLGS and included in State approved local budgets.

We have received a spreadsheet detailing the withholdings, and an estimated percentage impact on municipal budgets. Municipalities are listed in declining order, based on that estimate. You can access the spreadsheet at

Cuts in property tax relief funding, especially in the final month of a budget year, do not help to speed our State’s economic recovery. They do not help homeowners, especially not those already facing unemployment or possible foreclosure. They do not inspire business confidence in New Jersey. They disrupt the careful plans of local officials, already struggling mightily to serve their fellow citizens in the midst of this recession.  And add to the ever growing challenges of the 2010 budget cycle.

The League is exploring a possible legal challenge to this unprecedented State policy surprise. We are also in contact with the Corzine Administration and Legislative leaders. As this is a fluid situation we will keep you informed of any developments.

If you have any questions, contact Jon Moran at 609-695-3481, ext. 121.

Very truly yours,

William G. Dressel, Jr.
Executive Director




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