New Jersey municipalities, including East Windsor Township, would be in line to receive additional state aid under proposed legislation that is making its way through the State Legislature.
The bill, co-sponsored by state Senators Troy Singleton (D-Burlington) and Declan J. O’Scanlon Jr. (R-Monmouth), would require New Jersey to restore state aid to the towns by increasing the amount of money they receive in energy tax receipts for property tax relief. It would take five years to full restore the lost state aid.
“Affordability is the number one problem facing our state, and it can no longer be ignored. Clearly, this bill is a win for property taxpayers,” Singleton said.
The proposed bill would require New Jersey to increase the amount of money that towns receive through the Energy Tax Receipts Property Tax Relief Fund, providing direct tax relief to the towns, Singleton said.
State budget constraints means cuts in the amount of Consolidated Municipal Property Tax Relief Ad (CMPTRA) that was given to all towns in 2008, 2009, and 2010, in addition to the cuts made in energy tax receipts. The cuts have not been restored.
East Windsor Township Mayor Janice S. Mironov, who is also the vice president of the New Jersey Conference of Mayors, applauded the proposed bill that would restore more than $330 million in state aid to the towns over a five-year period.
“This bill is good. It puts it back on the legislators’ radar. It is long overdue to take action. We will continue to push to get the money restored to the taxpayers,” Mayor Mironov said, adding that the bill would counteract New Jersey’s “major unprecedented grab” of energy tax receipts.
“Here is an analogy. East Windsor Township is the collector of property taxes. Can you imagine how the school district would react if we collected the money (school district property taxes) and said, ‘You know what, we’ll keep a portion to use it in our budget,'” Mayor Mironov said.
“That is no different than the state taking the energy tax receipts. The money belongs to the municipality, not New Jersey,” she said.
To put it in perspective, Mayor Mironov said, East Windsor Township received $4.8 million in energy tax receipts and CMPTRA aid for 2007 for property tax relief funding. State aid was reduced to $3.5 million in 2008, and it has been frozen at that number for the past 12 years.
This means New Jersey has diverted at least $1.3 million annually from East Windsor Township taxpayers, for a cumulative total of $15.6 million over 12 years – and that figure does not take into account inflation or interest adjustments, Mayor Mironov said.
Singleton’s bill is not the first proposed legislation that seeks to restore energy tax receipts to the towns. Similar legislation was proposed by state Assembly members Daniel Benson (D-Mercer/Middlesex) and Wayne DeAngelo (D-Mercer/Middlesex) and Mila Jasey (D-Essex/Morris) in 2013, but the bill stalled.
The energy tax receipts has a long history.
For many years, towns assessed a gross receipts and franchise tax on public utilities and then collected the money at the local level. The gross receipts tax was based on the value of infrastructure that the utilities had in each town.
But in the 1980s, New Jersey became the collection agency. The state was supposed to distribute energy tax receipts to the towns for state aid, but it has been skimming off some of the money for its own use.
The state also was required to increase the energy tax receipts distribution at the rate of inflation.
Instead, New Jersey has kept much of the money that was intended to be returned to the towns for property tax relief and has used it to balance its own budget – a move that has angered many towns that have lost state aid.