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Posted on: January 31, 2022

Legislation Restoring Energy Tax Receipts Advancing

On Thursday the Senate Community and Urban Affairs Committee unanimously approved S-330, which increases distribution to municipalities from the Energy Tax Receipts Property Tax Relief Fund over five years to restore municipal aid reductions and requires the additional aid to be subtracted from the municipal property tax levy. The bill is now 2nd referenced to the Senate and Budget Committee for its consideration. The Assembly companion, A-1012, awaits consideration by the Assembly Community Development and Affairs Committee.  
  
The League supports the advancement of the legislation and urges you to contact your Senator and Assembly representatives expressing support.
  
 Energy Tax Receipts is a tax for public utilities for the use of the public right of way in lieu of property taxes. Originally, these taxes were assessed and collected by municipalities; however, the law changed to have the State collect the revenue for the convenience of the public utilities. The State was supposed to transmit the funds to the municipalities, much like how the municipalities transmit the funds it collects on behalf of the school district and county. However, in 2008 funds were diverted to the State’s general fund. This practice has continued under both Republican and Democratic Administrations.
  
Since 2008, approximately $14 billion has been diverted from municipalities to the State’s general fund. As a result, municipalities have had to eliminate or reduce services, increase fees or property taxes or a combination of the same. The time has come to restore to local budgets the millions in property tax relief that have been annually diverted to meet State needs. To see how much revenue has been diverted from your municipalities, please use the 2021 ETR Impact Calculation individual sheet. Simply insert the annual amount of aid your municipality received and the sheet will update to reflect the shortfall over time.
  
 We thank Senator Singleton and Senate President Scutari for sponsoring this legislation, and for their efforts to restore important assets to local government. 
 
Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x112.

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