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TagsBY TOM HESTER SR.
NEWJERSEYNEWSROOM.COM
The financially strapped N.J. state government Tuesday delayed issuing $20.7 million in aid to 421 cities and towns, a decision that could force increases in property taxes or reductions in local services.
Local officials are bracing for possibility the outgoing Corzine administration or the incoming Christie administration may cut the aid completely.
The state Division of Local Government Services told local officials the money "is being withheld at this time as the governor, treasurer and the executive branch agencies develop a plan for maintaining the constitutionally required balance in the state budget ... Municipalities will receive guidance from the Division of Local Government Services once a final decision has been made on the CMPTRA (aid) withholding."
The $20.7 million represents 5 percent of the total so-called Consolidated Municipal Property Tax Relief Act aid authorized for municipalities in the 2009-10 state budget.William G. Dressel, director of the New Jersey State League of Municipalities, the Trenton-based lobbying arm of local governments, said 243 of the 421 cities and towns each receive over $100,000 in aid annually. He said Newark was expecting $3 million.
"There are towns that are going to be confronted with a serious cash flow problem,'' Dressel said. "I'm very much concerned that this is just the first salvo of many more to come.''
Dressel said the League is exploring a possible legal challenge to what he described as an unprecedented state policy surprise.
"We are also in contact with the Corzine Administration and legislative leaders,'' he said.
The aid delay comes as the Corzine administration attempts to close a $1 billion gap in the current state budget and the Christie administration faces an $8 billion deficit in the 2010-11 budget.
"Local budgets were carefully crafted and balanced assuming that the State would honor its commitment to a certain level of property tax funding,'' Dressel said. "That level had already been reduced twice within the last twelve months – first, in January, when state revenue projections were not met, and second, in July, when the state's current budget imposed further cuts.''
Dressel said, "Cuts in property tax relief funding, especially in the final month of a budget year, do not help to speed our state's economic recovery. They do not help homeowners, especially not those already facing unemployment or possible foreclosure. They do not inspire business confidence in New Jersey. They disrupt the careful plans of local officials, already struggling mightily to serve their fellow citizens in the midst of this recession.''
The delay in state aid came as League of Municipalities' officials revealed that a task force of mayors is examining possible alternatives to using property taxes to finance education.
"The task force will recommend reforms that ensure all school districts will be provided with the resources needed to educate their students, and, those reforms will significantly ease the burden of regressive property taxes that continue to plague our State's citizens, businesses, and hopes for economic recovery,'' Dressel said. "Further, the reforms will be revenue neutral and they will respect the needs of our poorer school districts.
Dressel could not immediately provide examples of school funding alternatives to the property tax.
The towns that are having aid delayed are listed here in PDF format.
