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Benson & DeAngelo Bill Requiring Energy Tax Revenue Be Paid Directly to Municipalities OKd by Assembly Committee

(TRENTON) – Legislation sponsored by Assembly Democrats Daniel Benson and Wayne DeAngelo (both D-Mercer/Middlesex) that would require certain energy tax receipts currently collected by the state be paid directly to municipalities was approved Thursday by an Assembly panel.

The intent of the bill is to ensure towns are able to collect the amounts of energy tax receipts that they were originally promised when the state revised the collection and distribution process in 1997. Energy tax receipts are tax revenue collected from utilities and energy companies.

“This money belongs to our municipalities. Telling cash-strapped towns that they need to do more to reduce the financial burden on taxpayers, while taking money away that helps them do that, is disingenuous and only sets them back,” said Benson. “This bill returns this tax revenue to municipalities to help ease the burden of property taxes on residents as it was originally intended.”

“Many towns are being forced to do more with less as they grapple with increasing costs and reduced state aid. The state has been chipping away at this money which was meant to help municipalities offset expenses. At the end of the day, the ones who pay the hefty price are the taxpayers. It’s time to put this money back where it belongs for their sake,” said DeAngelo.

The bill ((A-2753) would change the manner in which energy tax receipts are distributed to municipalities. Under current law, energy tax receipts are all collected by the state. Often, through the annual appropriations act, the state retains a portion of the energy tax receipts that are supposed to be distributed to municipalities under statutory law. The bill would require that, commencing with state fiscal year 2014, the state treasurer calculate the amounts due to municipalities pursuant to statutory law, adjusting for inflation, and that payments be made directly to the municipalities by the taxpayers.

In state fiscal year 2014, the amount to be apportioned to, and collected by the municipalities would be $1,063,566,000. That represents the amount which would have been required to be distributed to municipalities under the statutory provisions of the “Energy Tax Receipts Property Tax Relief Act,” N.J.S.A.52:27D-438 et seq., including annual increases for inflation.

Under the bill, the state treasurer would advise each energy taxpayer of the amounts to be remitted directly to each municipality, based on the existing statutory apportionment method.

The bill was released by the Assembly Housing and Local Government Committee.