Mayors: Give us back our energy tax
Published in the Asbury Park Press (APP.com) on June 30, 2012
By Bob Makin, Staff Writer
This the second in a two-day series on energy tax credits. Part 1 was published on Sunday.
While governors have been finding ways to skim money from municipalities for years, Gov. Chris Christie has devalued utility rights of way by withholding a larger portion of energy tax receipts than any of his predecessors, Piscataway Mayor Brian C. Wahler said.
Many state officials who claim that municipal governments are trying to circumvent a state-mandated 2 percent cap on budget levies either are unaware or don’t appreciate the extensive requirements of daily municipal operations, Wahler said. They include the governor and state Senate President Stephen Sweeney, the mayor said.
“Senator Sweeney is clueless,” Wahler said. “He has no idea what’s going on in municipalities.
“In Piscataway, we did away with accepting grass clippings,” he continued. “Most people cut their grass and leave it, but some people cut their grass and bag it. We were paying $20,000 to a landfill to dispose of that, so we instituted a clipping fee. Residents who have to bag their clippings have that option. Members of the Legislature and the governor say such fees are a way of circumventing the cap. They’re crazy and way out of touch. They don’t have a clue, nor do they want to.”
Sweeney said he agreed with Wahler that municipalities are entitled to the energy tax receipts, but they also waste taxpayer money by not consolidating more services with their counties and neighboring towns.
Edison Mayor Antonia Ricigliano said many municipalities already share services. They should share more, said Sweeney, a 13-year Gloucester County freeholder director who saved taxpayers millions through consolidation, often to the chagrin of the municipalities involved, he said.
“In many instances, towns could save money, and they choose not to for one reason: home rule,” Sweeney said. “The countywide EMS in Gloucester County has been rated the best system in the state two years in a row. We’re giving the service to the towns. They don’t have to pay for equipment, gas, training, liability. Yet, only 16 of the 24 towns are on board with it.
The reason towns don’t want do things differently and give up a service is because they don’t control it any longer. If a service is as good or not better and can be provided cheaper, it’s the job of mayors to do that. Towns that are looking at fees are trying to circumvent the cap.
“Some towns are aggressive in sharing services and doing things efficiently,” he continued. “I’m not criticizing every mayor, but you see towns now sharing trash collection and both save $100,000. They announce what a good job they’ve done, but they could have been doing that for years. The only reason they’re doing it now is because they have a cap. That’s why we put the cap in place. We need to find ways to reduce the cost of governing in the state of New Jersey. We collect way too much money.”
Shrink the state
Assemblyman John Wisniewski, D-Middlesex, one of several legislators sympathetic to the economic plight of mayors, suggested that Christie advise them how to best make up for lost funds.
Having once co-chaired a consolidation committee, Wisniewski agreed that the state’s 565 towns should consolidate whenever possible, but not all can without assuming more costs than savings.
A complete merger of towns often is impossible, he said.
“The two Princetons, after many years of trying, found it more advantageous to be together than not,” Wisniewski said. “That’s a rarity. In Edison and Metuchen, one is so overwhelmingly larger than the other, the small town may feel a loss of any identity. They also have two different names. Princeton has the luxury of having the same name and being roughly equal size. How are you going to consolidate Newark and Jersey City, and what would that accomplish?”
State officials in favor of consolidation should look in the mirror, said Gregory J. Bonin, Branchburg’s township administrator. The state has more room to shrink than local communities, Bonin said.
“Where are services to the community coming from?” he asked. “Are they provided from the state or at the local level? They’re provided at the local level. So then why are they cutting resources?”
“The mantra is let’s starve the beast, deprive local government any services to make residents fend for themselves,” Wahler added. “But how are you going to provide public safety that way? In some towns in the northeast part of the state, they have State Troopers helping the municipal police departments. I would love to supplement my police force with troopers. Is the governor going to fork them over? He’ll say, ‘It’s a municipal issue. You deal with it?’ But it needs to be equitable for everybody.”
'Mugged by the governor'
While mayors have the support of some legislators, Christie seems to be gaining public support through town hall meetings, during which he touts an income-tax cut and decries excessive municipal spending.
“You have to have money in order to make the promises he’s not intending to keep,” Wisniewski said. “The governor needs the revenue to put together his budget and maintain the fiction of his Jersey comeback tour. If he doesn’t have the money, he can’t maintain the fiction. Municipalities, unfortunately, are an afterthought.”
“The governor is more interested in making town hall speeches than really tackling problems,” Wahler said. “I feel like in the last couple of years, towns have been mugged by the governor. The governor doesn’t have to fill potholes. We’re the ones dealing with the day-to-day problems of our communities. His disingenuous comments tell me he has no clue about what’s affecting municipalities.”
The governor has been vocal in identifying and criticizing the roots of the property tax crisis, spokesman Kevin Roberts said.
In the decade before Christie took office, a 70 percent increase in property taxes was fueled by a 68 percent increase in local government spending, Roberts said.
“The problem is that the rise in municipal spending relates to, in large part, personnel salaries and benefits,” he said, “so we’ve instituted reforms to assist with controlling those costs while capping the tax levy at 2 percent to give relief to property taxpayers. Some of the key elements of tool-kit reforms we’ve called for still remain stalled in the Legislature, like ending sick- and vacation-day abuse and civil-service reform. Mayors are responsible for setting their budget priorities, but it’s time for them to look at new ways to save costs, including shared services and consolidation.”
Many mayors are following state income tax cuts, Wahler said.
Based on canvassing door-to-door, the mayor said income tax is not as hot an issue among voters as property tax.
“Mayors don’t wake up in the morning to see how they’re going to raise taxes, which is what you would think when you hear the governor talk at town hall meetings,” he said. “I’m beginning to think he gets out of bed in the morning thinking about how he can cut back more from towns around the state.”
Feeding the beasts
Jon Moran, senior legislative analysis of the New Jersey State League of Municipalities, said that “state aid” mainly consists of the energy tax receipts that municipalities used to collect for themselves. Most of the cuts in state funding actually relate to the withheld energy tax receipts, he said.
The more the state withholds, the more “aid” is cut, he said.
“State aid is an extreme misnomer designed to make the state look good,” Bonin added. “It’s not state aid. It’s township money taken from us.”
“If you were to count a ‘withheld’ amount as a ‘cut,’ wouldn’t you need to count the $267 million in savings from pension reforms to local government as an ‘increase’ in ‘aid’ as well? You go down a very unclear and convoluted path if you define ‘cuts’ and ‘increases’ as something other than a year-over-year increase or decrease.”
Energy tax receipts are not the only revenue source the governor has his hand in, Wahler said.
Most of the money generated from the local courts ends up getting shipped to the state, the mayor said. Inspection fees that residences pay municipalities for electrical and plumbing go to the state Department of Community Affairs, he said.
“The public doesn’t have any inkling of that,” Wahler said. “They think they’re giving it to run the day-to day-operations, but that’s miniscule because the state is taking all different pots of revenue to run their day-to-day operations. But we’re the ones who have to hire the court employees and the inspectors who go out to make sure someone has installed something correctly, as far as plumbing and electrical, to make sure the house doesn’t burn down or flood out.”
Not all municipalities gripe about state cuts and withheld and collected municipal funds.
Franklin Township has grown accustomed to it, Mayor Brian Levine said.
“More is always better because it makes it easier, but it’s kind of like a household when there’s a loss of income: You do without,” Levine said. “This is the reality right now.”
“This is how it has to be for a while because we tax too much,” he said. “Not every town needs a police chief or a public works director, all this repetitive administration. My county has 300,000 residents. Philadelphia has 1.2 million, but we have more fire equipment than them. That makes no sense.
“Government spends as much money as it is given,” Sweeney continued. “There is always a need. I’ve learned from being in government that there is never enough money. We have to make decisions about how much we want to give it so that it works efficiently. We give governments in this state more money than we need to. The question is how much are we going to give?”