March 23, 2009
New Jersey League of Municipalities’ President, to Present Municipal Perspective on Governor’s Proposed Budget to Senate Committee in Montclair. League Board Member to Echo Local Concerns to Assembly Budget Committee in Trenton
Tomorrow morning, March 23, League of Municipalities President, Mayor Tim McDonough of Hope Township, will testify before the Senate Budget and Appropriations Committee, meeting at Montclair State University. At the same time, League Board Member, Mayor Gary Passanante of Somerdale, will speak before the Assembly Budget Committee in Trenton.
The impact of the current recession has dealt a flurry of blows to New Jersey municipalities. As the foreclosure and unemployment rates rise, the tax collection rate falls. And no matter what the collection rate is, the county and the school district will get 100% of the property tax portions they levy. Any declines in the collection rate are borne entirely by the municipality. As the economy stalls, new construction slows with it. Local officials cannot rely on new ratables. As interest rates fall, the rate of return on municipal reserves falls with them. Local leaders cannot rely on their rainy day accounts.
Next year’s budget, as proposed by the Governor, would shave an aggregate of $31.2 million from this year’s diminished municipal revenue replacement funding. Though never welcome, cuts of municipal property tax relief funding are no longer surprising – certainly not at this time. However, they, inevitably, put upward pressure on property taxes. This year, the League will again ask the Legislature to recognize that fact and to give municipalities the tools they will need to relieve that upward pressure. Local budget balancers hope the State will be able to find the means to help on the revenue side. They also hope that the State will give them tools that can be used to address the pressures that unfunded mandates put on the expenditure side.
It won’t cost the State a penny to relax or eliminate some of the many mandates that have been imposed, legislatively and administratively, over the course of decades. These mandates drive up the costs of local government and force local budget makers to address a laundry list of State priorities, before they can even begin to plan on how best to meet the local need for vital municipal programs and services.
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For further information contact: William G. Dressel, Jr., Executive Director at (609)695-3481, extension 122 or 609-915-9072.