By Darryl R. Isherwood | March 5th, 2012 - 12:08pm
| More

The State League of Municipalities and local mayors told the Assembly Budget Committee this morning they believe the state should restore $271 million in state aid cut in fiscal year 2011.

The aid money was cut by the administration Gov. Chris Christie and is collected by the state in the form of Energy Tax Receipts.  Municipal leaders say the money is rightfully theirs and is a small fraction of the more than $3.4 billion they say has been diverted by the state over the past decade to its own general fund.

Calling the money “aid” is incorrect, they say, as it is more accurately local money that has been diverted for state use.

“It’s important to remember, keeping the money in the state budget doesn’t save one taxpayer one dime,” said Jon Moran, senior legislative analyst for the League of Municipalities.  “It only changes the level of government that spends the money. And it also changes the purpose for which the money is spent.”

The budget committee was holding a discussion concerning the revenue, which league and local officials say has been diverted in ever increasing amounts since 2003.

The energy tax receipts in question are made up of several revenue streams, including a sales tax on energy, corporate business taxes and TEFA – the transitional energy facilities assessment.  The revenue streams took the place of the Public Utility Gross Receipts and Franchise tax, which was originally collected by municipalities to reimburse for rights of way containing energy towers and infrastructure within their borders.

In the 1940s, the state became the collection agent for the tax, with the understanding that the money would continue to be forwarded to municipalities.

Once the state began collecting the money, league officials charge, it became fair game, and beginning in the 1980s was diverted in ever increasing amounts to the state’s general fund.  The result was a drop in what was once considered untouchable municipal revenue.

In 1997, energy deregulation led to a change in the structure, and a law passed at the time codified the state’s entitlement to some of the money while at the same time capping the skim.  A 1999 law required the state to phase in an increased payout to municipalities and added an inflation boost each year.  The law also required that aid levels never drop below the amount paid in 2002.  The law included a “poison pill” that required the state to meet its requirements or forfeit the right to collect the money.

But instead of steadily increasing aid to municipalities, what actually happened is the state began siphoning money from another pool – CMPTRA aid – to increase the energy tax receipts.  Because the CMPTRA aid was not protected by the poison pill, it was targeted by governors seeking to side-step their obligations on energy tax receipts, league officials and local mayors charge.  The result was a steadily shrinking CMPTRA pool that has dropped from $786,932,761 in fiscal year 2000 to a proposed $207,486,291 in fiscal year 2013.  That number represents a $297.9 million transfer from CMPTRA to the energy tax pool in the upcoming budget.

During that time the energy tax receipts paid out as state aid rose from $750 million to $1.086 billion while the state skim has risen from $246.9 million to a proposed $735 million in the upcoming fiscal year, a fact which enrages some league and municipal officials.

Officials say they understand that expecting the full amount is not realistic, but going back to 2011 would make only a small impact on the state’s budget.

“For the state to balance their budget on the backs of the municipalities is unfair,” said Edison Mayor Toni Recigliano.  “The message is that you are bigger therefore you can take what rightfully belongs to us.  We are willing to abide by the 2 percent cap, although it is difficult. Our residents should not be forced into foreclosure or leaving our towns because they cannot afford the taxes. We are only asking for the restoration of this year’s $271 million and that every town be brought back to their 2009 CMPTR/Energy Tax Receipts level.”

The Back Room

McGreevey expresses no desire to be power broker in Newark mayoral race

Former New Jersey Governor James McGreevey might remember that former Newark Mayor Sharpe James played a significant role in helping him to get that title. But regarding the highly contentious Newark mayoral race between candidates Ras Baraka and Shavar Jeffries, McGreevey told PolitickerNJ.com on Thursday that he has no interest in picking a side.  

Read More >

Wake-Up Call

Morning Digest: April 17, 2014

Bergen Dems demand Donovan cancel fundraiser with Christie after unlimited contributions commentsHACKENSACK - Bergen County Democratic Chairman Lou Stellato called on Bergen County Executive Kathleen Donovan to cancel a fundraiser scheduled for May 5 with Gov. Chris Christie after he made remarks on allowing unlimited campaign contributions to political...

Op-Ed

The future of NJ Politics should not be politicians investigating politicians

By JON BRAMNICK Voices around the country agree with our concern that "bipartisan committee led by John Wisniewski is partisan." Below are observers who agree Wisneiwski's committee is not bipartisan: Chuck Todd, NBC News: "Democrats made a mistake... Read More >

Contributors

(4-16-14) New Jersey Vote By Mail Law - The voter turnout for New Jersey’s November gubernatorial election was the lowest since the days of prohibition, coming... more »
When it comes to profiling Christie, facts are for wussies (4/10/14) - As the national media stories on our Guv pile up, expect more blunders about the Garden State.... more »
This week I begin a series called Dispatches from Somewhere Else. Based on my on-going experiences as an everyman in New Jersey politics, these Dispatches review the hollowness of... more »
Watching Governor Chris Christie's shocking BridgeGate implosion, it's easy to forget the time when he truly seemed unstoppable.  Blessed with incredible political gifts and a Jersey bluster to match,... more »

Quote of the Day

Quote of the day

“The new agenda is charter schools. It’s a profit-making business. $500 million will not be in our hands. The school board is an advisory board. We are not going to tell the governor to unleash the dollars. Don’t be fooled. It’s not abracadabra. It’s politics.” - Paterson Mayor Jeff Jones

- PolitickerNJ.com

Poll

Who does Alieta Eck want to win the CD12 Democratic Primary?:

Resources

Visit the PolitickerNJ.com/resources page for links to the best collection of information on New Jersey state government.

 

  • Polls
  • The best blogs
  • Columnists
  • State election results
  • Assembly election results
  • Local party websites
  • And more.

PolitickerNJ.com/resources