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Also made public employees pay more for health care

The governments of New Jersey cities and towns turned to sharing public services and using surplus funds to comply with a new state mandate that property taxes can increase by no more than 2 percent annually.

The actions come to light in an annual Legislative Priorities Survey conducted by the New Jersey State League of Municipalities which garnered the responses of over 100 mayors. The responses to specific issues provide direction for League staff to take when lobbying the Legislature in Trenton.

This year was the first budget year that municipal officials had to comply with the 2 percent property tax levy cap.

29 percent of the mayors indicated their municipality’s final total levy increased 2 percent, with the exclusions for debt services, capital expenditures, pension cost, health benefit cost and declared emergencies. While 19.35 percent saw tax levy increases of between 1.5 and 1.99 percent over last year’s level. Followed by 18 percent whose tax levy increase was under 1 percent.

When asked what actions they took to meet the 2 percent cap the mayors ranked them as follows:

1. Shared services

2. Used a higher percentage of surplus than in previous years

3. Increased health care contribution from employees

4. Deferred capital improvements

5. Concessions from public employees

6. Increased fees

7. Reduced staff from full-time to part-time

8. Reduced appropriation to the capital improvement fund

9. Reduced services (tie)

10. Lay-offs (tie)

11. Furloughs (tie)

12. One-time revenue (i.e. sale of public property) (tie)

13. Initiated accelerated tax sale

Municipalities are continuing to see an increase in tax appeals. 66 percent of the mayors saw an increase in their residential tax appeals in 2011. Of those, 63 percent noted that the results of the tax appeals will impact their available surplus in their 2012 budget. However, 71 percent noted that they do not plan on increasing their budget in regards to fighting tax appeals in 2012.

Another impact on municipal budgets is the cost associated with defending a municipality’s compliance with the Open Public Records Act (OPRA). Only 15 percent of the mayors noted that their municipality had appeared before the Government Records Council or Superior Court regarding OPRA. Of those municipalities, municipal attorney fees ranged from $1,300 to $10,000. Only one mayor reported paying prevailing attorney fees of $6,000.

The survey also indicates a changing trend in how cities and towns plan to meet their affordable housing obligations. Nearly half of the mayors noted that once a prospective housing obligation is determined their municipality will implement 100 percent municipal sponsored partnerships with non-profit sponsors housing to address part of their future obligation. These projects rely heavily on subsidies, and as a result, 94 percent support a legislative change to push the July deadline established in 2008, which establishes that a municipality has four years to commit their housing trust fund dollars.

Of an interesting note, 59 percent of the mayors surveyed support an increase in state motor fuel taxes if and only if the proceeds are to be used to finance the repair and renovation of municipal and county transportation infrastructures.

—TOM HESTER SR., NEWJERSEYNEWSROOM.COM