TRENTON — Gov. Chris Christie’s proposed $34.4 billion budget calls for the largest payment into the public employee pension system in state history, but lawmakers question whether it’s short on funding needed to tame New Jersey’s notoriously high property taxes.

Members of the Assembly Budget Committee raised that question Monday during a hearing on Christie’s budget with officials from the state Department of Community Affairs, including its commissioner, Richard Constable.

The spending plan for the fiscal year beginning July 1 calls for a $2.25 billion payment into the pension system. That is the largest ever proposed, but it keeps municipal aid to New Jersey’s towns and cities flat for a fourth consecutive year.

“Municipal aid is an important component, and it’s $400 million less than it was in 2010. Do you see it the same way from an arithmetic standpoint?” said Assemblyman John Burzichelli, D-3rd of Paulsboro.

Constable responded that the record pension payment, along with state debt service and health care costs, was accounting for nearly all of the budget’s spending increase.

“We don’t have as much dollars as in previous years,” he said. “Just from the pension payment standpoint, the administration is making a $2.2 billion payment. That’s more than any previous administration.”

Constable also touted the administration’s success in slowing the rapid growth of New Jersey’s highest-in-the-nation property taxes, which increased at rates of 2.5 percent in 2011, 1.6 percent in 2012 and 1.7 percent last year.

Eighty towns decreased their property tax levies in 2013, and another 80 raised theirs less than 1 percent, he said.

“By any measure, this administration’s property tax reforms, which took effect in calendar year 2011, have helped stem the tide of skyrocketing property tax bills,” Constable said. “Over the last three years, the total property tax levy increased at historically low rates.”

A 2 percent tax cap imposed on local governments by Christie and the Legislature in 2011 is largely responsible for the small increases, but mayors have stressed that it also has forced reductions in services that taxpayers expect from their local governments.

And although the rise of property taxes generally has slowed during Christie’s watch, his critics frequently note that his administration never has restored the property tax rebates given to seniors, the disabled and low- and middle-income homeowners to the amounts awarded during most of Democrat Jon S. Corzine’s time as governor.

“The actual amounts people are paying is still high because of the lower rebates,” Burzichelli said.

Assemblyman Troy Singleton, D-7th of Palmyra, also was critical of the administration’s practice of diverting money collected in lieu of property taxes from utilities and energy companies — called energy tax receipts — to help balance the budget.

Singleton and Assemblyman Jay Webber, R-26th of Morris Plains, have introduced legislation to require the Department of Treasury to return an additional $330 million of the energy tax receipts it collects to municipalities and mandate the extra aid be applied to reduce local tax levies.

“This seems like a pretty easy, straightforward way to put property tax dollars back in taxpayers’ pockets,” Singleton said.

Constable said the administration was adhering to the law and continuing a practice used by former Govs. Jim McGreevey and Corzine.

“The real issue has to do with dollars. We don’t as a state have the ability to give more money to municipalities,” he said, adding that towns and cities continue to see significant savings due to pension and health benefit reforms pushed by Christie.

Christie’s budget also includes $8.5 million to cover some of the expenses for towns, school districts and counties to enter into “major consolidations and mergers.”

“We know when these mergers occur, there are massive savings available,” Constable said.

Assemblyman Chris Brown, R-8th of Evesham, applauded the proposal but questioned whether the appropriation was large enough.

Constable said that the appropriation was expected to cover about 20 percent of the costs of any consolidations and mergers during the upcoming fiscal year, but that the administration was open to negotiating an increase.

He said $8.5 million “is what we think is appropriate right now.”

Lawmakers and Christie have until June 30 to agree on a balanced budget.

Original article