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 Media Advisory

 July 1, 2011

Trenton, NJ

LEAGUE CALLS FOR ACTION TO RESTORE TRANSITIONAL AID FUNDING

 

In the wake of this week’s action on the State Budget, the League of Municipalities has asked Governor Christie and Legislative Leaders to work together to restore vital municipal property tax relief funding.

Enacting the State’s FY 2012 Appropriations Act yesterday, Governor Christie line-item vetoed some $900 million in spending. Cuts to municipal property tax relief programs accounted for over $240 million of that total. This follows last year’s massive cuts in dedicated municipal property tax funding, which included $275 million diverted from the Energy Tax, CMPTRA and Open Space funding programs.

 The cuts to municipal property tax relief programs, enacted by the Governor, would:

Eliminate the $50 million Municipal Public Safety Aid Program, which was meant to help municipalities with higher than average tax rates and/or lower than average property values, which have experienced an increase in crime rates;

  • Reduce Transitional Aid, which is meant to help municipalities deal with extraordinary difficulties, from $149 million to $10 million;
  • Redirect to the State’s General Fund about $49 million from Sales Taxes collected in and promised to New Jersey’s Urban Enterprise Zone municipalities for economic redevelopment; and
  • Cut per capita library aid in half, to $3.7 million.

Once again, it seems that municipalities are being asked to sacrifice more than their fair share. Since the Governor’s line item vetoes have resulted in the State anticipating a $640 million surplus – the largest cushion in the past decade – the League has asked the Administration to work with the Legislature towards a supplemental appropriation to help some of the most fiscally stressed municipalities through these challenging economic times.

Specifically, State policy makers need to focus on reinstating full funding for the Transitional Aid program. The $149 million appropriation for this purpose, which was reduced to $10 million, was part of the Governor’s original budget proposal. These funds are only available to municipalities anticipating difficulties making payments toward nondiscretionary or critical obligations including, but not limited to, debt service, contractual obligations, and public safety payroll.  And it is only available where local officials have “implemented substantive cost reduction strategies.”

 

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For further information contact: William G. Dressel, Jr., Executive Director at (609)695-3481, extension 122 or 609-915-9072. the League on Twitter at: http://twitter.com/NJ_League

 

 

 

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