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Benson, DeAngelo & Jasey Bill to Return Revenue to Cash-Strapped Towns, Make Up for Years of State Diversions Gets Assembly Ok

Legislation sponsored by Assembly Democrats Daniel Benson, Wayne DeAngelo and Mila Jasey that would provide additional property tax relief to residents by restoring hundreds of millions of dollars worth of cuts to the amount municipalities received in their share of state energy tax revenues and municipal aid was approved Thursday by an Assembly panel.

“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 (D-Mercer/Middlesex). “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 (D-Mercer/Middlesex).

The intent of the bill (A-2753) is to ensure towns are able to collect the amount 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.

“Every dollar that has been taken from our towns in the past is an additional dollar taken from property taxpayers,” said Jasey (D-Essex/Morris). “This has resulted in the loss of scarce revenue dollars to municipalities and decreases in services. This bill will help right that wrong for cash-strapped towns struggling to get by, especially with the Governor’s cuts in state aid over the last several years.”

The bill 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 amount to be apportioned to municipalities would be $1,108,115,000 under the Energy Tax Receipts Property Tax Relief Act.

This bill would also require the state to distribute to each municipality an amount equal to the difference between its total payment of Consolidated Municipal Property Tax Relief Aid (CMPTRA) and Energy Tax Receipts Property Tax Relief Aid (ETR Aid) in Fiscal Year 2008 and Fiscal Year 2012. This additional State aid will restore approximately $331 million in reductions to CMPTRA and ETR aid that were made due to state budget constraints in Fiscal Years 2009, 2010, and 2011.

The measure now awaits consideration by the full Assembly.