By Lea Kahn, Staff Writer
Feeling shortchanged, Lawrence Township has signed onto a letter to Gov. Chris Christie and the state Legislature to restore full state aid to the municipality.
The Township Council authorized Mayor Greg Puliti to write to state lawmakers at its meeting last week to seek the full amount of money owed to the township under state law. That amount is $2.9 million, which would amount to 11 cents on the municipal tax rate.
Lawrence Township is owed $6.9 million in state aid for 2011, but the state has only given $3.9 million to the township. At stake is $2.9 million the state is withholding. Last year, Lawrence received $3.9 million in state aid instead of the full $6.8 million it was owed.
If Lawrence Township had received the full $6.9 million, the proposed 2011 municipal tax rate increase of 6 cents per $100 of assessed value likely would not have been needed. The last time Lawrence Township received its full amount of state aid was 2001. The amount was $5 million.
For many years, municipalities assessed a gross receipts and franchise tax on public utilities and collected the money at the local level. The gross receipts tax was based on the value of infrastructure the utilities had in each municipality.
But in the 1980s, New Jersey became the collection agency. The state was supposed to distribute energy tax receipts, but it has skimmed off some of the money for its own use. The state also was required to increase the energy tax receipts distribution at the rate of inflation.
The state has increased the amount of energy tax receipts distributed to the municipalities, but that increase has been offset by a decrease in the amount of distribution of the Consolidated Municipal Property Tax Relief Aid, which is a compilation of a variety of tax-relief programs.
New Jersey has kept much of the money that was intended to be returned to the municipalities for property tax relief and has used it to balance its own budget, and that’s what has angered Lawrence Township officials.
Mayor Puliti is throwing the council’s support behind the letter to state lawmakers, which was written by Mayor Janice Mironov, of East Windsor Township. She is the New Jersey League of Municipalities’ second vice president and also chairs the league’s new Statutory Funding Compliance Committee. The league is behind the effort to restore full funding.
In the letter written by Mayor Mironov and backed by Mayor Puliti, she wrote, “a promise made should be a promise kept, and municipal officials have not forgotten and will not sit quietly by while municipal funds continue to be diverted for state uses.”
”State officials are quick to announce a 2-percent spending cap for municipalities, passage of so-called ‘toolkit’ legislation and a claim of no new state taxes,” the letter states.
”Yet at the same time, they are diverting huge amounts of municipally owed monies from energy tax receipts. In effect, state officials are transferring their problems down to local officials and increasing local property taxes,” the letter states.
Mayor Mironov’s letter, which Mayor Puliti signed, calls on Gov. Christie and the Legislature to introduce and adopt a Fiscal Year 2012 state budget that provides for the full statutory distribution of Energy Tax Receipts Property Tax Relief Program and Consolidated Municipal Property Tax Relief Act revenue replacement funding.
The two programs are referred to as “state aid,” but they are actually revenue replacement programs, intended to replace property tax relief funding that formerly was generated through taxes assessed and collected, specifically to fund municipal programs and services, according to the league.