June 22, 2012
URGENT ACTION NEEDED
Re: PLEASE CONTACT YOUR STATE LEGISLATORS IMMEDIATELY
URGE THEM TO SUPPORT MUNICIPAL PROPERTY TAX RELIEF FUNDING BILLS URGE THEM TO VOTE “YES” ON S-1900/A-2921
Again, we thank you for your efforts on this vial municipal property tax relief matter. We know that S-1900 is on the Senate Board list for Monday. We believe that A-2921 will be on the Assembly Board.
When they are in Trenton next week, your Legislators will be given the chance to vote on these bills, which will restore vital funding to local budgets.
PLEASE CONTACT YOUR LEGISLATORS IMMEDIATELY AND URGE THEM TO APPROVE S-1900/A-2921.
The bills were released by the respective Committees just yesterday. On behalf of Mayors in all Legislative Districts, we thank Senators Sarlo, Stack, Cunningham, Greenstein, Pou, Ruiz, VanDrew and Weinberg for voting to advance S-1900. We, likewise, extend our appreciation to Assembly Budget Committee Members Prieto, Schaer, Burzichelli, Countiho, Johnson, Singleton, Watson Coleman and Wimberly for standing up for Mayors in their Districts and all around New Jersey by voting to advance A-2921.
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.
After the bills were released from Committee, we were provided with a copy of the proposed amendment. We believe that the sponsors of the proposed amendment may not fully appreciate its potential impact on local programs and services. Acceptance of this amendment could severely limit the ability of local officials to address local budget demands and needs. It could also undermine the rationale for the restoration of funding embodied in S-1900/A-2921.
For example, in SFY 2009, 2010 and 2011, the State classified some diverted CMPTRA funding as ETR (in order to dodge the ‘poison pill’). In those same years, due to State budget needs, combined ETR/CMPTRA was cut by $331 Million. Every municipality in the State was forced to make do without these vital resources. S-1900 and A-2921 were introduced to phase-in the restoration of that funding.
If this amendment had been in effect in those years, the apparent increase in ETR distributions would have forced the municipalities receiving them to also reduce their property tax levies, even as combined ETR/CMPTRA was cut.
With this amendment in place in the future, the State’s use of an accounting gimmick to avoid the Energy Tax ‘poison pill,’ could force mayors to balance their budgets with less revenue replacement funding from the State and less levy growth than lawmakers thought prudent when they imposed the caps just two years ago.
Also, the use of increased ETR funding to artificially 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. 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.
This proposed amendment 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, because of uncertainty about future State funding commitments, the proposed amendment could impose a disincentive to municipalities from reducing spending below cap.
Finally, 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. Just because the State has the power to impose this requirement, that doesn’t make it right.
Please ask your Legislators to vote against this amendment, if it is offered on the floor.
URGE YOUR LEGISLATORS TO GIVE MAYORS THE PROPERTY TAX RELIEF TOOLS THEY NEED. URGE THEM TO VOTE “YES” ON A-2921/S-1900.
We will gladly acknowledge all who support us on this.
We remind you that for more information and a link to our latest Talking Points, you should 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 firstname.lastname@example.org
Very truly yours,
William G. Dressel, Jr.