In a recent meeting with the State Treasurer, League President Mayor Jim Cassella of East Rutherford voiced our concerns with a key piece of Governor Murphy’s State budget proposal. Mayor Cassella had previously raised those concerns in his testimony before the respective Legislative Budget Committees.
As previously reported, the Governor’s proposal would shake the foundations of the Energy Tax Receipts Property Tax Relief Fund (ETR), which, for more than 20 years, has delivered reliable and significant property tax relief to municipal home- and business-owners, all around our Garden State.
Specifically, the Governor’s proposal would zero-out the ETR, which has always been funded through taxes (Sales and Corporate) levied on energy suppling utilities. In lieu of the ETR, funding would be derived through the Income Tax. This change, we have been told, will be effected not by the passage of a new statute, but instead by the insertion of new budgetary language.
In a recent post on the League’s Town Crier blog, we try to explain the State’s reason for suggesting this action, and the reasons for our strong opposition. In short, from the State perspective, this shift would give State budget makers $788.5 million to spend on other priorities. In short, from our perspective, the reshuffling could jeopardize future ETR funding.
We see two concerns with the proposal. First, it would open the lock box that has ensured the annual ETR distributions would meet the minimum requirements of the statutes, since 1997. Second, this wouldn’t be the first time that the State has used budget language to give itself greater spending discretion. The last time it happened led, over several years, to the deterioration of CMPTRA property tax relief. We need assurance that ETR property tax relief will not suffer the same decline.
You can access the Town Crier piece at https://njlmblog.wordpress.com/2018/04/30/governors-etr-budget-proposal-and-historys-hard-lessons/.
Contact: Jon Moran, Senior Legislative Analyst,email@example.com, 609-695-3481, ext. 121