Energy Tax Restoration Resource Center
Energy Tax Receipts in New Jersey
Originally, these were taxes assessed and collected locally from utilities for the use of public land, and the funds were used for municipal programs and services. Overtime, for the convenience of the public utility companies, the State became the collection agency on behalf of municipalities, with the understanding that the State would remit payment to the municipalities – in the same manner of municipalities collecting tax revenue for the school districts and counties. Ultimately, the State rebranded the local municipal revenue as “State Aid”, or replacement programs intended to replace property tax relief funding. Overtime, this forced municipalities to turn to property taxes to supplement funding.
For more details, read this history of how the Energy Tax Receipts have evolved.
Impact on Your Municipality
Calculate the impact that the diversion of Energy Tax Receipts has had on your municipality by inputting on the individual ETR sheet the amount of Energy Tax Receipts your municipality received each year. The worksheet will automatically calculate the difference.
Legislation: Bill Numbers
The above bills would increase distribution to municipalities over two years, and prohibits anticipation of certain revenue in municipal budgets.
Current Legislative Action
As part of the state’s FY2023 budget package, in addition to a flat Energy Tax Receipts and Consolidated Municipal Property Tax Relief (CMPTRA), $75 million in Municipal Relief Funds was included as the first step towards full Energy Tax Receipts restoration.
Senator Singleton and Senate President Scutari introduced S-330, which increases the distribution to municipalities from the Energy Tax Receipts Property Tax Relief Fund, and restores funds to municipalities. The legislation was unanimously passed by the Senate on March 3, 2022. The legislation had bi-partisan support with Senators Connors, O’Scanlon, Polistina, Sarlo, Schepisi, Stanfield, Gill, Bramnick, Bucco, Johnson, Ruiz, Gopal, Holzapfel, Lagana, Madden, Pou, Turner, Greenstein, Diegnan and Zwicker signing on as co-sponsors.
Assembly Representatives Benson, Moriarty and Jaffer sponsored the Assembly companion, A-3804, which was referred to Assembly State and Local Government Committee. The legislation has bi-partisan support with Assembly representatives Jasey, Reynolds Jackson, Moen, Mosquera, Spearman, Space, Wirths, Haider, Stanley, Auth, DeFuccio, Carter, Jimenez, Conaway, Sumter, Verrelli, Swain, Tully, McKnight, Danielsen, DeAngelo, Caputo, McKeon, Kennedy, Freiman, Karabinchak, Atkins, Mejia, Tucker, Calabrese, Clifton, and Park signing on as co-sponsors. However, the bill is still awaiting a committee hearing.
We view A-3804/S-330 as the first major step in addressing property tax affordability as this legislation provides for a two-year phased-in restitution of the $331 million, which has been annually diverted from dedicated municipal funding programs – the Energy Tax Receipts Property Tax Relief Fund (ETR) and the Consolidated Municipal Property Tax Relief Aid (CMPTRA). During State Fiscal Years 2009, 2010, and 2011, this funding was diverted from towns to address State budget accounts. Ever since those dedicated revenues have not been distributed to municipalities. As drafted, the legislation would eventually bring funding for all municipalities back to 2008 levels.
Adopt a Resolution of Support
A sample resolution you can adapt for your municipality.
NJLMEF: Friends of Local Government Policy Paper
Appropriating Energy Tax Receipts: The New Normal for New Jersey. A Friends of Local Government Policy Paper, published by the NJLM Educational Foundation in March, 2013, analyze the repurposing of tax dollars originally collected for municipalities and intended to mediate property taxes instead having been appropriated by the state to bridge budget gaps.
NJ Newsmakers Interview
A video discussing the impact of the State budget on municipalities. Filmed by NJ Newsmakers in May 2018, with then NJLM Executive Director Michael J. Darcy, CAE (ret.),
NJLM Letters to State Legislators
- In a letter dated June 15, 2022, NJLM Executive Director Mike Cerra addressed A-3804/S-330 to Members of the General Assembly. The letter urged legislators to support A-3804/S-330 (PDF) as part of the State Budget process.
Energy Tax Talking Points for Elected Officials
Talking points on S-330/A-3804, which increases distribution to municipalities from Energy Tax Receipts Property Tax Relief Fund over two years; prohibits anticipation of certain revenue in municipal budgets.Link to page
History of Energy Utility Taxation in NJ
A history of Energy Utility Taxation in New Jersey, from its beginnings as the Public Utility Gross Receipts and Franchise Taxes, and details on how these taxes have evolved, and how collection and distribution has changed. Most importantly, a discussion on how changes have, and continue to effect, local governments.Link to page
State Aid History (PowerPoint)
A presentation produced by Jon Rheinhardt, Bergen County CFO. At the time of creating this presentation. Rheinhardt was the Admistrator/CFO of Wharton. The presentation provides a timeline for Energy Taxes, and discusses State Aid.Link to page