The State Constitution gives the Governor of New Jersey broad powers over the Budget. After it is approved by the Legislature, the Governor can reduce or eliminate spending on any line item. He can also change language in the budget, designed to guide the decisions and activities of Executive Branch departments, divisions and agencies.
Included among the language changes made, by the Governor, to the FY ‘17 Appropriations Act, was one that could put a serious hole in municipal budgets, all around the State. Specifically, the language puts at risk the total amount of every municipality’s Consolidated Municipal Property Tax Relief (CMPTRA) allocation. That’s over $280 million of statewide property tax relief funding, any or all of which might never make it out of the State’s coffers in Trenton.
The Division of Local Government Services’ ‘Best Practices’ program, was created by Governor Christie in his first year in office, to encourage municipalities to review their operations with an eye towards greater economy and efficiency. From the program’s origination, the “Best Practices” survey and implementation were problematic. To be fair, DLGS staff has welcomed League of Municipalities’ input and involvement in developing the items for each year’s ‘Best Practices’ inventory. The inventory is sent to each municipality for completion. It is, then, sent back to DLGS for scoring.
Until this year, language in the Appropriations Act allowed the Division to withhold up to five percent of a municipality’s annual CMPTRA allocation for failure to achieve a high score on its ‘Best Practices’ inventory. Also, before this year, no municipality was subject to penalties for failure to comply with a new requirement. In other words, DLGS could not penalize you for not doing something in the past that you didn’t know you’d be asked to do in future.
Consolidated Municipal Property Tax Relief funding compensates municipalities for revenue losses they would have otherwise sustained due to state-level tax policy decisions. Absent CMPTRA funding, property taxpayers would have to cover the losses that occurred over the years, when the State reduced or eliminated fees on entities (like railroads, banks and insurance companies) that used to help fund local services. As such, CMPTRA was never meant to improve the lot of local property taxpayers. It was only meant to keep things from getting any worse.
With the Governor’s Language Changes in this year’s budget , authority has been given to the Director of DLGS to: add any requirement to the ‘Inventory’, as he sees fit; to determine, at his own discretion, a minimum acceptable score; and to withhold, as to him shall seem appropriate, any or all of a municipality’s CMPTRA funding. We were given no advance notice that this draconian change was even being considered.
We have great respect for the DLGS Director and for the DCA Commissioner,but we cannot believe the Legislature ever meant to grant such broad authority over so much property tax relief funding – to any Executive Branch agency.
We have contacted the Department, the Division and Legislative Leaders, expressing our serious concerns. Click here to see our letter to the DLGS. And click here to see the DLGS response. For more, click here for the League’s July 7 letter.
We will keep you posted on future developments.
Jon Moran, Sr. Legislative Analyst at 609-695-3481 x121, jmoran(at)njslom.org
Lori Buckelew at 609-695-3481 x112, lbuckelew(at)njslom.org