Thanks are due to every local official who contacted their legislators, urging them to protect the Energy Tax Receipts Property Tax Relief Fund (ETR), in the State’s upcoming budget. And thanks are due to Senate Budget and Appropriations Chair, Senator Paul Sarlo, and Assembly Budget Chair, Assemblywoman Eliana Pintor Marin, for listening to League Members and preserving this dependable and significant source of municipal property tax relief, now and for the future. Finally, thanks are due to every legislator who has recognized the importance of this.
Our work on this, however, is not yet done. We must continue to press the Legislature and the Administration to preserve ETR lockbox and keep this dedicated funding off-budget.
The annual Appropriations Act bills that the State Senate (S-2019) and General Assembly (A-4200) will vote on tomorrow reverse the Administration’s proposed ETR shift and put the lid back on the ETR ‘lockbox.’ That provision of the proposed Appropriations Act will help local officials better serve their neighbors and constituents for years to come.
As you know, for over 100 years, municipalities have been able to count on certain taxes paid by energy producing utilities. These were originally assessed and collected locally, to compensate local citizens for the utilities’ use of public rights of way and for local services provided to power suppliers. In 1980, the State decided to centralize tax collection. It also promised to distribute the proceeds to New Jersey municipalities. That promise wasn’t always kept, but when utility taxes were reformed in 1997, the new statute set up a dedicated fund – the Energy Tax Receipts Property Tax Relief Fund – and assured annual distribution amounts.
In each of the twenty years since its creation, the ETR ‘lockbox’ has ensured reliable and meaningful property tax relief funding for every New Jersey municipality.
To be clear, the Administration’s proposal would not have decreased the tax relief funding that any towns will get, this year. We appreciate that. But it would have set a dangerous precedent. Specifically, the Governor’s proposal would have opened the ETR ‘lockbox,’ which has always been funded through taxes (Sales and Corporate) levied on energy suppling utilities. Instead, that proposal would deliver level funding with Income Tax dollars. The shift would have shaken the foundations of the ETR and placed future funding in jeopardy.
There remain serious differences, on myriad issues, between the Legislature and the Governor, on the State’s next budget. But we are encouraged by the ETR provisions in the pending bills.
You have asked your legislators to protect ETR property tax relief. They have taken the first step to do that. Now is the time to thank them for that. And, as discussions toward a possible budget compromise continue, you can also ask them to stand firm on the ETR.
Contact: Jon Moran, Senior Legislative Analyst, firstname.lastname@example.org, 609-695-3481 x121.