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May 2, 2012

Re: State Budget Process Moves Toward Resolution Energy Receipts and CMPTRA Funding Issue Unresolved

Dear Mayor:

Will the State budget begin to restore any part of the hundreds of millions of dollars in municipal property tax relief funding that have been diverted to other uses over the past decade?

The answer to that question may depend on your willingness to reach out to your legislators on this crucial issue.

In February, Governor Christie proposed a budget that will govern State spending in the Fiscal Year that will begin on July 1, of this year. Over the past two month, the members of the Senate Budget and Appropriations and the Assembly Budget Committees have listened to the testimony of State Cabinet Officers, nonpartisan budget experts from the Office of Legislative Services, the representatives of special interest groups, the representatives of public interest groups (like the League) and the general public. A few more Cabinet Officers are scheduled to testify this week and next. Then, on May 23 and 24, the Committees are scheduled to receive final updated revenue estimates.

Over the next two months, State Legislators will consider amendments to the original proposal and put together the appropriations act that will be sent to Governor Christie for his consideration.

Local officials need to remind them of past promises regarding the distribution of Energy Tax Receipts and CMPTRA funding. And you need to impress on them the importance of this funding to your constituents.

The Energy Tax “poison pill” was meant to restrain the wills of future legislators and future executives, who might use their powers to gain an advantage, regarding the distribution of Energy Tax Receipts Property Tax Relief funding. The “poison pill” would prevent State collection of Corporation Business Taxes, if the State ever decides to ignore the Energy Tax Receipts Property Tax Relief distribution requirements. We know that the State has avoided the “poison pill” by shifting funds from CMPTRA to the Energy Tax.

We realize that the Energy Tax and CMPTRA distribution laws are not self-executing. We know that the Courts have accorded, to the State, the right to over-ride the statutory dedication of revenues in its annual appropriations act. The State needs to have that right, in order to deal with emergencies and crises that may occur, and to balance its budget. But the State should not exercise that right, year after year after year. It should be the exception, rather than the rule.

We still harbor hopes that, this year, the State of New Jersey will begin to restore to municipalities some of the property tax relief funding promised them by the laws of the State of New Jersey.

By the most conservative of estimates, the proposed budget will increase State spending by 3.7%. The Treasurer has estimated that the State’s Income Tax receipts will increase by 6.3%. The Sales Tax will net 4.7% more during the State’s next Fiscal Year. And Corporation Business Tax collections will rise by 10.9%.

Further, the proposed budget will reallocate revenues from the Clean Energy Fund and the Affordable Housing Fund. Those revenues will not be available in future years, as the phase-in of State pension liability payments progresses and as the planned “Pay as You Go” component of the NJ Capital Transportation Program grows.

If the restoration of municipal revenue replacement funding, provided through the Energy Tax and CMPTRA, does not begin this year, when will it ever?

Please contact your legislators. Urge them to support increased municipal property tax relief funding.

Visit our Energy Tax Restoration Center at for more information. If you have any questions, contact Jon Moran at 609-695-3481, ext. 121.

Very truly yours,


Hon. Janice Mironov, First Vice President,
NJLM; Chairperson, Energy Receipts Restoration
Task Force and
Mayor, East Windsor Township

Hon. Arthur R. Ondish, President,
NJLM and
Mayor, Mount Arlington Borough





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