Bill Would Provide $440M in Additional Property Tax Relief Over Next Five Years,Make Up for Years of State Diversions
TRENTON – Senator Paul Sarlo and Assemblyman Troy Singleton today unveiled new legislation to provide nearly $440 million in 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.
The bill would restore $385 million cut from the program in fiscal years 2009, 2010 and 2011, while providing an additional $54 million to support aid increases required under existing law. The funds would be provided over a five-year span, with the first $87.8 million payment coming in the upcoming 2013 fiscal year. After the 5-year run-up, the state would be mandated to distribute the full amount of energy tax revenues to municipalities.
“The days of Trenton taking property tax relief from municipalities to pad the state budget need to end, plain and simple,” said Sarlo (D-Bergen), chairman of the Senate Budget & Appropriations Committee. “It’s no coincidence that the state’s raids of energy tax revenues meant for municipalities have corresponded with a growing property tax crisis. Returning this money to municipalities, where it belongs, is not just good for towns struggling to meet the needs of residents, but for property taxpayers struggling to make ends meet.”
“This is right thing to do for our communities and our taxpayers,” said Singleton (D-Burlington), a member of the Assembly Budget Committee. “In the past, every dollar taken from our towns was an additional dollar taken from property taxpayers, and now every dollar taken from our towns means decreased services and less value to taxpayers. With this innovative approach, we can not only provide municipalities with the revenues they deserve, but also further insulate taxpayers by requiring it to go for property tax relief.”
The returned energy tax revenues would be statutorily dedicated to property tax relief, and municipalities would still be subject to the state’s current 2 percent property tax cap.
The bill also includes an assurance – a so-called “poison pill” – that the state live up to its obligation to municipalities through the budget. Under the measure, if the state’s annual appropriations act doesn’t provide the required one-fifth increments over the next five years, the entire Corporation Business Tax would sunset.
“We need to hold Trenton’s feet to the fire and ensure no one is allowed to play fiscal games with property tax relief,” said Singleton. “This measure will make sure that towns continue to receive their full amount of aid, and that local property tax relief is maximized.”
“We have heard from countless mayors whose communities and taxpayers would benefit enormously if the state would just live up to its obligations and fund them as the law requires,” said Sarlo. “We have to stop talking about property tax relief as some sort of ideal, and make it a reality.”
The bill is to be introduced in the Senate today by Sen. Sarlo. Assemblyman Singleton said he will introduce the measure in the Assembly at that chamber’s quorum call scheduled for May 10.