William G. Dressel Jr.,executive director, N.J. League of Municipalities
On June 30, the governor signed a budget that included about $154 million in municipal property tax relief funding cuts. It could have been worse. His original proposal would have slashed municipal property tax relief funding by $189 million.
The funding adjustments contained in the final budget, demonstrate the realization that the original proposal was unwise, unfair and unreasonable. We are, therefore, grateful to the governor and Legislative leadership for agreeing to lighten the impact of this budget on local property taxpayers all around the state. Still, in the face of rising costs, local policy makers all around the State will need to account for the loss of major revenues. And, inevitably, so will our property taxpayers.
In announcing the appropriations cap rate for “State fiscal year” municipalities, the state’s Division of Local Government Services noted that the cost of operating a municipality in New Jersey – our “cost of living” – had increased by 6 percent last year. All else being equal, our formula aid should have increased by that percentage, just to allow us to maintain the status quo, in terms of taxes and services. Instead, we are being cut.
Against the backdrop of the slumping national economy, many of local taxpayers are already buckling under the burden of rising costs and stagnant incomes. And all of them are already paying property taxes high above the national average. Two years ago, the Legislature dedicated one-half of the increased Sales Tax to property tax relief. Last year again, state policy makers recognized and acted on New Jersey’s chronic need for property tax relief by, among other things, increasing CMPTRA funding by 2 percent. But this budget represents a retreat.
We sincerely hope that this year’s budget will mark a turning point and that we can return, next year, to an emphasis on meaningful and sustainable property tax relief.
