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Property Tax Impact of Pension and Benefits Commission’s “Roadmap to Resolution”

The League of Municipalities in partnership with New Jersey School Boards Association today issued a report assessing the impact of the local boards of education assuming the cost of the local education retiree health benefits, which is currently a state obligation, as well as the new retirement plan for local (K-12) education employees as suggested by the Governor’s “Roadmap to Resolution” report. View Report (PDF)

League President and Piscataway Mayor Brian C. Wahler stated that “Our major concern, and those we believe of property taxpayers, is whether this roadmap is cost-neutral. We are concerned that the proposed savings resulting from the health care proposals is unlikely to offset the shift of the unfunded liabilities to the local level. This report illustrates in real numbers what the local property tax impact will be shifting the state’s cost to local property taxpayers.”

This policy neutral analysis, using information from the NJ Transparency website, was prepared by Raphael J. Caprio, Ph.D., Director of Bloustein Center for Local Government Research, Rutgers University to provide an informed answer to the potential (and estimated) impact on each municipality for each one % “employer” contribution that would need to be raised on the local level should local boards of education be asked to fund part, or all, of the employer Teachers Pension Annuity Fund (TPAF) contribution.

Since the potential employer “pension match” is still a hypothetical, the 1% liability is used so the various scenarios or policy proposals can easily be calculated.

League 1st Vice President and West Caldwell Mayor Joseph Tempesta added that “Local governments, and our employees, have made their pension and health contributions every year. The local systems are fiscally sound and should not be asked to absorb the costs of the State pension plans for teachers, which are currently the responsibility of the State. This policy neutral report provides Mayors and local property taxpayers with a tool to analyze the impact of the shifting cost to the local governments.”


For further information contact:
Brian Wahler, League President and Mayor of Piscataway at 732-562-2301

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