May 15, 2012
User Fee Cap Bill Is Wrong for New Jersey
Yesterday in Trenton, Point Pleasant Beach Mayor Vincent Barrella, Wharton Administrator/CFO Jon Rheinhardt, veteran municipal manager Burton T. Conway and League of Municipalities’ Legislative Analyst Lori Buckelew testified before the Senate State Government Committee in opposition to S-1914. The bill requires certain user fees for the provision of traditional municipal services to be included within the 2% municipal and county property tax levy cap.
User fees are not a new budgeting tool; nor is there a statewide effort by municipalities to circumvent the 2% levy cap. All local units of local government enact user fees to recapture some of the costs for services provided in their community. As local units struggle to meet 2% levy cap, without the full effects of the management reforms and the continued diversion of energy receipt taxes, officials are forced to re-examine their budgets and priorities. In order to deliver the services that their residents expect and want local officials have been making structural changes to their budget, including how programs are funded. Municipalities must continue to have the flexibility to meet these service demands of residents and visitors.
Quoting Governor Christie, Mayor Barrella reminded the Committee “’To attack our history of local decision making is wrong for New Jersey.’ … Unfortunately, S-1914 represents an attack on local decision making. In these difficult times it is essential that municipalities are allowed to retain a reasonable degree of flexibility in dealing with how services are provided and paid for. S-1914 appears to be a response to the efforts of those in some municipalities to manage this problem, and, respectfully, I believe it to represent overkill. There is a much more effective check on local officials who seek to game the system than S-1914. That check is the local electorate. Not a day goes by where upon a visit to the local supermarket or convenience store I do not encounter my constituents, and you can rest assured that those I encounter have no problem letting me know what they think. Respectfully, government that is closest to the people governs best.”
Mr. Rheinhardt and Mr. Conway both noted that if municipalities are to operate as a business they need to have available business tools, such as “user fees” and pricing systems. User fees are at times the best method to pay for any public service. Experts agree that it is appropriate to fund some services by user fees, especially those services for which a recipient and a cost can be clearly and accurately identified and calculated.
Other problems with the bill include the uncertainty of the open-ended definition of “traditional municipal services,” as well as the implementation date of S-1914. Finally, we note that the proposed limit would not apply to user fees instituted for county or school district services.
S-1914 is scheduled for a hearing before the Senate Budget and Appropriations Committee on Thursday, May 17.
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For further information contact: William G. Dressel, Jr., Executive Director at (609)695-3481, extension 122 or 609-915-9072.
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