The Effects of Energy Deregulation
In the mid-1990s energy deregulation took hold in New Jersey, and the future of the Franchise Tax was very much in doubt. The rise of major energy users switching to non-utility power sources to save money, in part by avoiding the tax, meant this important municipal revenue was at risk.
In 1997, legislation replaced PUGRAFT with the “Energy Tax Receipts Property Tax Relief Fund.” PUGRAFT was replaced with up to five revenue streams. More on this in the next section.