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June 21, 2012

MUNICIPAL PROPERTY TAX RELIEF FUNDING BILLS ADVANCE
Committees Release A-2921/S-1900
FINAL VOTES SCHEDULED FOR MONDAY

Dear Mayor:

Today in Trenton, Mayors Antonia “Toni” Ricigliano of Edison, Colleen Mahr of Fanwood, Vincent Barrella of Point Pleasant Beach and David Fried of Robbinsville spoke before the Assembly and Senate Budget Committees, in favor of companion bills, sponsored by Assemblyman Troy Singleton and Senator Paul Sarlo, designed to restore vital funding to local budgets.

S-1900 and A-2921 would phase-in, over five years, the restoration of $331 million in municipal property tax relief funding. First year funding would be about $66 million. The bills ensure that each municipality in the State will be restored to the 2007 (SFY 2008) Energy Tax Receipts and Consolidated Municipal Property Tax Relief Aid level, over 5 years. And the poison pill will protect that level of funding for each municipality, while continuing to require aggregate Energy Tax Receipts inflation adjustments.

Mayors all around the State thank the sponsors and support S-1900 and A-2921. The bills were released by the respective Committees and are scheduled to be voted on in the Senate and Assembly on Monday.

PLEASE CONTACT YOUR STATE LEGISLATORS IMMEDIATELY. URGE THEM TO VOTE “YES” ON A-2921/S-1900 ON MONDAY, JUNE 25.

Both Committees were asked to consider an amendment to the bill, which would require that any increased Energy Tax distributions would need to be used to reduce the local purposes property tax levy. The amendment was tabled in both cases. However, it may surface again on Monday.

We advise that you consult with your Finance Officer to determine the effect of such an amendment on your budget. Based on our quick review, we believe that the sponsors of the amendment may not have fully appreciated its potential impact. It appears the following problems could arise.

  1. The State could classify funding diverted from CMPTRA (as it has for the past 10 years), or any other source, as ETR funding. Overall level funding could still force a municipality to lower its levy. In fact, reduced total property tax relief funding, distributed to a greater extent as ETR, could force a municipality to reduce its levy.
  2. Increased funding classified as ETR used to reduce the levy would give a municipality a lower base for the next year’s budget. If the State does not distribute more in the following year, the municipality might actually have less funding available to meet local needs.
  3. If, in fact, the State distributed less than in the prior year, the municipality would have no mechanism to recoup the difference and definitely would have less available to meet local needs.
  4. Proposal assumes, wrongly, that the ONLY way to provide property tax relief is by reducing the capped levy. It may not even be the best way. In fact, the requirement would discourage municipalities from using the increased revenue for uses that are excepted from the cap.
  5. Just because the State has the power to impose this requirement, that doesn’t make it right. These revenues were always intended to be available for local use; and to be appropriated as locally elected and locally accountable officials determined to be in the best interests of their constituents.

If you agree with this analysis of the Amendment, you may want to share that with your Legislators, as well.

We want to thank Mayors Ricigliano, Mahr, Barrella and Fried for their willingness to step up for their constituents and their colleagues on this one.  We also want to thank all of you who have contacted your Legislators and urged them to support this effort and these bills. And, we thank the sponsors of A-2921 and S-1900, as well as all members of the Committees who voted to release this property tax relief initiative.

Our work is not done. Next week is crucial.

PLEASE CONTACT YOUR STATE LEGISLATORS IMMEDIATELY. URGE THEM TO VOTE “YES” ON A-2921/S-1900 ON MONDAY, JUNE 25.

For more information and a link to our latest Talking Points, visit our Restoration Resource Center at http://www.njslom.org/energy-tax-resource-center.html.

If you have any questions, contact Jon Moran at 609-695-3481, ext. 121 or jmoran@njslom.com

Very truly yours,

 

William G. Dressel, Jr.
Executive Director

 

 

 

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