LAWRENCE: Officials call for restoration of state aid

By Lea Kahn, Staff Writer
   For the third year in a row, Lawrence Township officials have written to state lawmakers — from Gov. Chris Christie, state Assembly and state Senate representatives in the 15th Legislative District — to restore full state aid to the township.
   Township Council passed a resolution last month calling on the lawmakers to “immediately restore in full all energy tax receipt funding.” A copy of the resolution has been sent to Gov. Christie as well as to state Sen. Stephen M. Sweeney, president of the state Senate.
   Copies of council’s resolution were to be sent to all state legislative leaders, as well as the mayors of the other 12 municipalities in Mercer County and the state Assembly and state Senate representatives in the 14th- and 15th Legislative Districts.
   ”We have been beating the drum for the last three years,” Councilman Greg Puliti said at the council’s Feb. 21 meeting. The state has collected the energy receipts tax and “whittled it down and whittled it down,” he said of the amount of money that the state has returned to the municipalities.
   ”It’s not right. We are trying to do it the right way and asking (for the state government) to restore it. We would be having a whole different conversation if the money was coming to us,” Mr. Puliti said.
   Lawrence Township was owed $6.9 million in state aid for 2011, but the state gave only $3.9 million to the township. At stake was $2.9 million that the state was withholding. In 2010, 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 2011 municipal tax rate increase of 6 cents per $100 of assessed value likely would not have been needed. The last time Lawrence received its full amount of state aid was 2001. The amount was $5 million.
   Lawrence Township is in line to receive $3.9 million for 2012 — the same amount as in 2011.
   ”If we had received what we should have, we would not be asking for a (municipal property tax rate) increase. The money would be there,” said Mayor Jim Kownacki.
   Mayor Kownacki was referring to the 5-cent tax rate increase in the proposed 2012 municipal budget, plus the additional 9-cent increase for which voter approval is being sought through a referendum question next month.
   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 1990s, 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 is what has angered Lawrence Township officials.
   William G. Dressel Jr., executive director of the New Jersey State League of Municipalities, dismissed proposals by state officials to offer property tax rebates or credits to residential property owners. He called on the state to restore state aid to at least 2009 levels.
   ”Rebates or credits will not fix one road or bridge. They will not put another police officer on the street or another fireman on duty. They will not promote prudent budgeting by locally elected and locally accountable municipal officials,” Mr. Dressel said.
   The cumulative effect of years of under-funding has left many towns with unmet needs, he said. Whether it is loss of public safety personnel, “dangerously” low surplus fund balances or any other local need, “local elected officials are in the best position to decide” how to spend the money, he added.
   Mr. Dressel said state legislators need to be reminded that keeping the money in the state budget “does not save one taxpayer one dime. It only changes the level of government that spends the money, and it also changes the purpose for which the money is spent.”
   Instead of being spent on local programs and services and being used to offset property taxes, the money has been spent as successive Legislatures and administrations have seen fit, Mr. Dressel said. And while the money was likely spent on good programs and put to good use, “they are not the uses intended in the original laws” governing state aid, he said.