July 1, 2010
LEAGUE OF MUNICIPALITIES STATEMENT
ON SPECIAL SESSION OPENING:
CAP PROPOSAL CAN WAIT
OTHER TOOLS NEEDED FIRST
Governor Christie opened this year’s Special Legislative Session with a speech to both Houses of the Legislature. The Governor focused on the issue of property tax caps. He indicated that he would not support the 2.9% statutory property tax levy cap, which has passed by both Houses.
As a compromise, Governor Christie has offered to support a 2.5% statutory cap, with an exclusion for the costs of currently existing collectively negotiated contracts, for the term of those contracts, and with exclusions for capital costs and debt service. The caps envisioned by the Governor could only be exceeded by a vote of the people.
This compromise would eliminate current levy cap exclusions for increases in amounts required to be raised to replace State formula aid due to a reduction in State formula aid from the previous local budget year; an increase in the reserve for uncollected taxes that is required by law; increases in health care costs; and increases in amounts for certain normal and accrued liability pension contributions.
The Governor intends for the Legislature to continue to meet until property tax solutions are in place. He includes, among those solutions, the 33 initiatives of his ‘toolkit.’ Our position on this compromise will mirror our position on that caps already offered by both the Governor and the Legislature. Those positions call for action on the caps as the final piece, not the centerpiece, of vital property tax relief initiatives. Before ANY cap proposal advances, State policy makers need to advance management reforms and mandates relief initiatives that will allow municipalities to continue to deliver vital services and programs to their citizens and businesses.
As the Governor said on Tuesday in South River, “It’s not just the cap. It’s the toolkit as well. Both must be done. One cannot be done without the other. If you do the toolkit without the cap, it renders the toolkit less effective. If you do the cap without the toolkit, it makes the cap unworkable. Both have to be done together.”
For further information contact: William G. Dressel, Jr., Executive Director at (609)695-3481, extension 122 or 609-915-9072.
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