Bill Would Restore, Over Five Years, Funding Cut from Energy Tax Receipts Program
Legislation sponsored by Assembly Democrats Troy Singleton and Herb Conaway, Jr., M.D. to provide significant property tax relief to taxpayers and municipalities by restoring funding that had been cut from the state’s Energy Tax Receipts program was advanced by an Assembly panel on Monday.
“This is one of many aid programs that has been reduced since the Christie administration took over, placing an additional burden on municipalities and, consequently, taxpayers,” said Singleton (D-Burlington). “When you factor in cuts to property tax relief, the average property tax bill in New Jersey has increased nearly 31 percent since 2009. That’s an enormous burden that needs to be mitigated.”
The bill (A-302) would amend the “Energy Tax Receipts Property Tax Relief Act,” to require the distribution of additional state aid to municipalities.
“When talking to constituents, their number one question is usually: ‘What we can do to lower property taxes?'” said Conaway (D-Burlington). “Fully restoring this promised funding will provide direct and much needed relief to the municipal tax burden.”
Budget constraints required reductions in the amount of Consolidated Municipal Property Tax Relief Aid (CMPTRA) distributed to all municipalities in Fiscal Years 2009, 2010, and 2011. Some municipalities also experienced reductions in their Energy Tax Receipts Property Tax Relief Aid (ETR Aid) distribution during that period.
The supplemental funding provided in the bill would restore, over a five-year period, approximately $331 million in reductions to CMPTRA and ETR Aid.
In Fiscal Year 2017, municipalities would receive an aid increase equal to 20% of the difference between their total payment of CMPTRA and ETR Aid in Fiscal Year 2008 and Fiscal Year 2012. Municipalities would receive equal increases in each of the following four fiscal years.
The fully restored amount would be distributed beginning in State Fiscal Year 2017 and in each fiscal year thereafter. The total amount of aid to be restored to each municipality would be in addition to the total amount of CMPTRA and ETR Aid distributed to each municipality in Fiscal Year 2012. This legislation also extends the existing ETR Aid “poison pill” protection to ensure that each municipality received an aid amount not less than the combined payment of CMPTRA and ETR Aid to municipalities in Fiscal Year 2012 and the additional aid distributed under the bill.
This legislation also amends current law to require a municipality to subtract any additional amount of ETR aid it receives, pursuant to the bill, from its adjusted tax levy when computing that amount for its next fiscal year. By deducting the additional amount of ETR Aid from the previous year’s levy, municipalities would be permitted to raise a lower amount of taxes through the levy for municipal purposes, thereby benefitting property taxpayers.
The bill was approved by the Assembly State Government Committee, which is newly chaired by Singleton.