A bill to restore hundreds of millions of dollars paid by utilities to local governments in New Jersey for property tax relief advanced through a state legislative committee on Monday.
The legislation, (A302), would restore $331 million in cuts to energy tax receipts and Consolidated Municipal Property Tax Relief Aid over five years. But there's a catch: the money must be used to offset local tax levies.
The energy tax was originally intended for local towns. But New Jersey governors, starting with Jon Corzine, diverted the money to the state treasury to balance the budget.
Local officials raised the issue with state lawmakers several years ago, asking them to return the badly needed funds. The Legislature passed a similar bill in 2012 that the governor vetoed. Similar bills were introduced in 2013 and 2014. The 2013 version passed the full state Assembly by an overwhelming majority but died in the state Senate.
The new bill is also sponsored by Republican and Democratic Assembly members. The state would restore the $331 million over five years, ending in 2021, when the municipalities would be returned to the amount they'd received in 2008.
Lawmakers in both the Senate and Assembly have said they're going to push property tax relief in the new session, which began last month. State data released Friday showed the average statewide property tax bill rose from $8,161 in 2014 to $8,353 in 2015.
"We have a crisis," said Assemblyman Jay Webber (R-Morris), a bill sponsor, said at Monday's State and Local Government Committee meeting.
Jon Moran, a legislative analyst with the League of Municipalities, said "the cumulative impact of years of underfunding have left many municipalities with serious needs and burdensome taxes."
He told the committee the organization supports the "vast majority" of the bill, but not the requirement the funds offset reductions in municipal levies. Local officials, he said, have few alternatives to generate revenue outside of the property tax levy. They have "demonstrated their dedication to limiting local property tax increases," but fear the bill's mandate will restrict their ability to address their communities' respective needs.
"We urge you to consider the need for high quality local programs and services and the constraints under which local officials operate," Moran said. "And we urge you to trust local officials to responsibly balance local needs and local resources."
Assemblyman Troy Singleton (D-Burlington) argued that money belongs to the taxpayers, not municipalities.
"At the end of the day, the money is not derived from town A or city B. It's derived from the people of those communities," he said. "So, the way we look at it, we are simply returning that money back to the people who actually put the money in the pot in the first place."