Governor Conditionally Vetoes Consolidation Bills

On Monday in Trenton, Governor Christie took action on a number of bills, including conditional vetoes of two dealing with municipal consolidation.

S-690/A-2921 was originally introduced ‘to increase flexibility, clarity, and available tools of optional municipal consolidation process.’ The bill included a number of worthwhile provisions. For example, it allowed consolidating municipalities to develop their own process for the equalization of property assessments in the new municipality, subject to the approval of the Director of the Division of Taxation in the Department of the Treasury. It permitted the designation of districts, in the new municipality, based on old or newly established boundaries with unique planning mechanisms, services, and ordinances. It allowed for the apportionment of existing debt, or debt newly created in furtherance of any aspect of a consolidation plan, among special taxing districts. And it allowed the consolidating municipalities to enter into any financial or other agreements, in order to adjust benefits between the municipalities, provide indemnification from legal actions stemming from a consolidation, or provide incentives to facilitate municipal consolidation.

However, we opposed the proposal, because the original bills denied citizens the right to vote on a consolidation proposal and repealed the requirement, in existing law, for the Department of Community Affairs to prepare, and share with the voters, an analysis of the fiscal impact of the proposed consolidation.

After sharing our concerns with the Senate sponsor, he agreed to amendments that allowed us to support the bill. But subsequent amendments on the Assembly side forced us to, again, oppose it. Those amendments actually limited local flexibility, increased consolidation costs and, thereby, discouraged future consolidations. Specifically, the bill that was sent to the Governor granted tenure, continued employment and terminal leave rights to the public safety employees of consolidating municipalities.

We shared the reasons for our opposition with the Governor, and we appreciate the changes that he has advanced in his conditional veto. The bill that he sent back to the Legislature would eliminate those cost-driving provisions. And, while another of his recommendations would allow municipalities with fewer than 100 people to be ‘absorbed’ by a larger municipality without the need for a referendum on the question, we can support the Governor’s position and urge the Legislature to concur with his conditions.

The League had supported S-956/A-2202, which would authorize special emergency appropriations for the payment of certain expenses incurred by municipalities to implement a municipal consolidation. As it was sent to the Governor, the bill would have, also, provided a levy cap exception for non-recurring expenses incurred by a municipality to implement a consolidation.

In his message to the Legislature on this bill, the Governor writes, “Because municipalities would be permitted to spread the non-recurring consolidation costs over five years, there is no need to exempt these costs from the two percent cap. Accordingly, I am recommending this exemption be removed from the bill.” The Governor also conditions his approval of the bill on the addition of a requirement that the special emergency appropriations be subject to approval by the Director of the Division of Local Government Services.

We are evaluating the bill’s usefulness to municipalities considering consolidation, in the light of these recommendations.

Contacts: Jon Moran, Senior Legislative Analyst, 609-695-3481×121, jmoran@njslom.org.