Message From the League President

James Cassella

James L. Cassella (Mayor, East Rutherford)

On March 13, 2018 Governor Murphy presented his first budget proposal to the Legislature and the people of New Jersey.

From our perspective, municipal property tax relief funding is of paramount importance. Regarding that priority, the Governor has called for level funding of comingled Energy Tax and CMPTRA property tax relief. Though better than a cut, we had hoped to see these funding sources restored to their previous levels.  Currently, funding for Energy Tax and CMPTRA property tax relief are $320 million lower than they were before the Recession of 2008. And while we appreciate the proposed $15 million increase in Transitional Aid; we are concerned with the proposed elimination of Meadowlands Tax Sharing Payments.

We have another concern with the proposal. It appears that the Governor’s proposal may jeopardize the most significant and reliable source of municipal revenues, other than the property tax, in future State budgets. For more than a century, municipalities have been able to lay claim to certain taxes paid by energy producing utilities. (Please see the League’s White Paper, Energizing Tax Relief, for a complete history of this issue.) Language in the Governor’s proposal would allow the State to access these revenues. For the upcoming State Fiscal Year, the revenues would be replaced by funding derived through the State Income Tax. But we have been unable to find, in the proposal, any assurance that the State will guarantee distribution of Energy Taxes in future years. For details on this issue, see our Town Crier blog post.

We will strongly oppose any proposal that would change the Energy Tax Receipts Property Tax Relief program from a dedicated source of municipal funding, which the State can only reduce at some risk to its own revenues, to another discretionary aid program, which the State could reduce at any time, without danger of any repercussions.

We have scheduled a meeting with the State Treasurer on this concern and will report back to you as soon as possible.