A proposal by Gov. Jon Corzine to restore a portion of municipal aid to municipalities with populations below 10,000 has gained the support of District 12 legislators.
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Corzine’s May 13 proposal revised the Consolidated Municipal Property Tax Relief Aid (CMPTRA) reductions originally proposed in the state’s fiscal year 2009 budget.
District 12 Assemblyman Declan O’Scanlon, a former local elected official in Little Silver, said last week he was glad to see the municipal aid restored.
"Cutting aid to municipalities is not a spending cut, it is shifting the tax burden further onto the shoulders of an already staggering middle class in the form of property tax increases," said O’Scanlon, a member of the Assembly Budget Committee.
State Sen. Jennifer Beck and Assemblywoman Caroline Casagrande, who both represent District 12 as well, have also come out in support of the joint Senate and Assembly alternative budget plan, which includes the restoration of a portion of the municipal aid.
O’Scanlon added, "It is especially egregious in light of the tens of millions which is sent year after year to urban municipalities, many of whom have questionable financial practices, under the guise of ‘temporary aid.’"
The proposal would ensure that no community faces an increase in the average residential property tax bill of more than $100, as a result of the CMPTRA reduction that was proposed for small communities with populations of fewer than 10,000, according to a May 16 Department of Community Affairs (DCA) press release.
For Sea Bright, the news of the restoration of some state aid was received with mixed reviews.
"The good news is that some state aid has been restored to Sea Bright," said Councilwoman Dina Long, who chairs the Finance Committee. "The bad news is the amount is $9,726 or 2/10 of a penny."
In Corzine’s original proposal, state aid to Sea Bright was eliminated altogether.
"This aid cut resulted in loss of revenue to the borough of more than $75,000, which is equal to half of the [municipal] tax rate increase [in the budget]," said Long at the May 20 Sea Bright Council meeting.
She added, "The state saw fit to eliminate aid to smaller municipalities in what is seen by us as a forced consolidation."
On May 20, the Borough Council adopted the $4.79 million 2008-2009 municipal spending plan, an overall increase of $195,645 from last year’s $4.5 million budget.
"We passed a budget that will help us continue to move Sea Bright forward, cope with the years to come and places the least amount of burden on our residents while continuing to service their needs," said Long in her speech before the vote on the budget.
The amount to be raised by local taxes for municipal purposes is $3.39 million, which is a $159,714 increase from last year’s tax levy of $3.23 million.
Long said that once the state budget is certified, the aid proposed will come back as tax relief for the taxpayers of Sea Bright and will lower the increase in the municipal tax rate from 2.6 to 2.4 cents per $100 of assessed value.
A homeowner living in a home assessed at $375,000, which is close to the average home in Sea Bright, would pay an additional $96 in taxes annually with the state aid, according to Long.
She said the $580,000 surplus was used to bring the municipal tax increase down as well and expects that the surplus will be regenerated to provide for continued tax stability in the future.
"Our increases came predominantly in expenses over which we have little control," said Long, referring to the reduction of state aid; increase in police pensions, salaries and wages; increase in public wages; and increase in debt service repayment.
Rumson Mayor John E. Ekdahl said the borough was not nearly as affected by the proposed state aid reduction as other local municipalities.
"For better or worse, we never really got a lot of state aid so when it got cut it didn’t affect us as much," he said.
In the original proposal, Rumson was set to receive $9,845 in municipal aid and with an additional $2,735 proposed restoration; the borough’s total would come to $12,580.
"We lost $107,000 [in municipal aid] and supposedly we are going to get some of that back, but the number is so small that we didn’t factor that back into our budget," said Ekdahl.
He said the public hearing and adoption of the budget is set to take place at the June 24 borough council meeting.
He said the final restoration of municipal aid cuts would not be a large enough amount of money to halt working on the budget.
"The cut in aid from Trenton this year resulted in about a penny’s increase in taxes," said Ekdahl. "In effect what happens is Trenton, looking for ways to save money, is just passing that on to the municipalities who are in turn passing it on to the taxpayers. Taxpayers wind up paying for the state aid anyway."
Although he didn’t have exact numbers, Ekdahl said the municipal aid cuts this year have resulted in a large cut in the borough’s road program, which normally receives about $1 million in funding each year.
Ekdahl also said for the first time in three years there will be an increase in the municipal tax rate in Rumson.
"The problem is you have wages going up every year, energy costs and the lack of state aid which did cause us to raise our taxes by 2 percent," said Ekdahl.
In Little Silver, where state aid was reduced by $164,000, $18,071 would be restored, leading to a total of $83,129 in aid for the borough.
"I don’t like the term ‘municipal aid,’ " said Little Silver Borough Administrator Mike Biehl. "It was comprised originally of many different taxes that were specifically earmarked for assistance to municipalities for property tax relief and a few years ago the state consolidated that and began calling it municipal aid. Now of course [the state] started cutting it."
He said previously that last year Little Silver received $923,007 in state aid, which was an increase of about $17,000 in state funds from the year before.
Biehl said the cut in municipal aid in Little Silver, where a 2008-2009 municipal budget proposal has also not yet been introduced, will probably lead to an unanticipated increase in the municipal tax rate.
"Gov. Corzine has presented a budget that will get New Jersey’s finances back on the right track," said DCA Commissioner Joseph V. Doria Jr. in a press release. "The proposed restructuring of aid to towns encourages communities across the state to examine the benefits of municipal consolidation and shared services, but also recognizes the importance of state aid for our state’s smallest communities."
Although figures have been proposed, they are still advisory in nature, as the final allocation rests with the state Legislature and final passage of the state’s Fiscal 2009 budget, according to the DCA press release.
For municipalities with a population of under 10,000, 25 percent of what the CMPTRA cut would have been restored (excluding transfers to Energy Tax Receipts), according to the release.
When the impact of the remaining aid reduction results in an increase of more than $100 on an average residential property, additional CMPTRA aid will be provided to limit the increase to $100, according to the release.
The revised numbers are available on the DCA’s Web site at www.state.nj.us/dca/lgs/muniaid/08_aid/08-09_cmptrarest.shtml.