UEZ UPDATE

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February 10, 2017 Update:   We’re disappointed to advise that the Governor vetoed this compromise legislation.    We do thank the the countless stakeholders, including impacted businesses, who joined us in supporting this legislation.   While these 5 zones are expired, 32 more are still in effect and the next expiration is in 2019.     We will continue to work with the Mayors in UEZ communities to enhance the positive economic impacts of UEZs.

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If you have not done so already, click here to ask the Governor to sign the UEZ compromise into law.

On December 20, the State Senate approved  A-4189/S-2670, compromise legislation that will extend, for two years, Urban Enterprise Zone (UEZ) authorization in municipalities where the program is scheduled to sunset at the end of this year. (Those municipalities are Bridgeton, Camden, Newark, Plainfield and Trenton.)  Previously, the NJ General Assembly approved the bill by a vote  of 56-15.

The bill now heads to the Governor for his consideration.  Earlier this year, Governor Christie conditionally voted A-2576/S-1080, which would have extended UEZ designation for participating municipalities for another 10 years.  With his conditional veto, the Governor asked instead that the Legislature direct the Commissioner of the Department of Community Affairs to conduct a study of the UEZ program “… which shall include, without limitation, an assessment of whether an alternative, location-based program to assist fiscally distressed municipalities is appropriate, and, if so, recommendations for the parameters of such a program …”

Respecting the Governor’s desire for a comprehensive analysis of the program, A-4189/S-2670 has been introduced as a compromise. The new legislation accepts the Governor’s recommendation regarding a DCA study of the program and research into alternatives. However, the bill provides a two year extension to the five UEZs that are set to expire at the end of this year.

The UEZ Program – first created in 1983 – offers incentives to participating businesses, designed to encourage business growth and stimulate local economies. Approximately 6,800 certified UEZ businesses participate and benefit from the advantages of the UEZ program statewide. These include a number of tax and financial incentives, including tax credits to hire local workers. The program authorizes qualifying retail businesses in the UEZs to charge and collect the State’s sales and use tax at one-half of the normal rate.

Those incentives allow businesses to attract customers to, and create employment opportunities in, economically distressed municipalities. UEZ designation is a vital tool in the tool kit of local leaders, working to bring their communities back from decades of decline, caused by housing and transportation policy decisions over which they had no control.

Absent action on these bills, businesses in five municipalities will lose UEZ benefits at the year’s end.

Contacts:    Michael F. Cerra, Asst. Executive Director, 609-695-3481, x120, mcerra@njslom.org

Jon Moran, Sr. Legislative Analyst, 609-695-3481 x121, jmoran@njslom.org

 

Support S-2670/A-4189, Extends UEZ authority in certain municipalities

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On Monday, November 21, the Assembly passed A-4189, a compromise bill that will extend, for two years, Urban Enterprise Zone (UEZ) authorization in municipalities where the program is scheduled to sunset at the end of this year. (Those municipalities are Bridgeton, Camden, Newark, Plainfield and Trenton.) The vote in the Assembly was 56-15.  The Senate Economic Growth Committee will consider this bill on December 12.

Earlier this year, Governor Christie conditionally voted A-2576/S-1080, which would have extended UEZ designation for participating municipalities for another 10 years.  With his conditional veto, the Governor asked instead that the Legislature direct the Commissioner of the Department of Community Affairs to conduct a study of the UEZ program “… which shall include, without limitation, an assessment of whether an alternative, location-based program to assist fiscally distressed municipalities is appropriate, and, if so, recommendations for the parameters of such a program …”

Respecting the Governor’s desire for a comprehensive analysis of the program, S-2670/A-4189 has been introduced as a compromise. The new legislation accepts the Governor’s recommendation regarding a DCA study of the program and research into alternatives. However, the bill provides a two-year extension to the five UEZs that are set to expire at the end of this year.

The UEZ Program – first created in 1983 – offers incentives to participating businesses, designed to encourage business growth and stimulate local economies. Approximately 6,800 certified UEZ businesses participate and benefit from the advantages of the UEZ program statewide. These include a number of tax and financial incentives, including tax credits to hire local workers. The program authorizes qualifying retail businesses in the UEZs to charge and collect the State’s sales and use tax at one-half of the normal rate.

Those incentives allow businesses to attract customers to, and create employment opportunities in, economically distressed municipalities. UEZ designation is a vital tool in the tool kit of local leaders, working to bring their communities back from decades of decline, caused by housing and transportation policy decisions over which they had no control.

Please SUPPORT S-2670/A-4189. Absent action on these bills, businesses in five municipalities will lose UEZ benefits at year’s end.

For more, click here to read our post of September 23 and November 7 update. 

Contacts:

Michael Cerra, Asst. Executive Director, mcerra@njslom.org, 609-695-3481 x120

Jon Moran, Sr. Legislative Analyst, jmoran@njslom.org, 609-695-3481 x121

N.J. Supreme Court Issues Decision that Narrows Previous Ruling on Labor Negotiations

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The issue over whether or not municipalities must negotiate temporary layoffs during periods of economic distress is back on the table. On November 29, the New Jersey Supreme Court decided IMO Robbinsville Twp BOE v. Washington Twp Educ. Assoc. , in the plaintiffs’ favor. Docket No. A-32-15 (2016).  IMO Robbinsville BOE sharply narrows the Court’s 2015 decision in IMO Borough of Keyport. 222 N.J. 314 (2015).

In Keyport, the Court upheld temporary layoffs by three Civil Service communities that were done pursuant to Civil Service regulations. At the time, Civil Service regulations allowed temporary layoffs during periods of economic distress. And, the Court held that such layoffs, and the regulations that allowed them, represented a “managerial prerogative” that could supersede required negotiation with public employees.

In Robbinsville BOE, the Court clarified that its decision in Keyport turned on the existence of applicable Civil Service regulations that allowed temporary layoffs during periods of economic distress. Ibid., Slip. Op. at 14-15. In Robbinsville BOE, the school district had argued that Keyport’s holding expanded beyond just Civil Service communities. The Robbinsville Court clarifies that this interpretation is incorrect and that Keyport’s impact is much more limited.

While the prospects for an economic downturn in the near future may be slight, non-civil service municipalities should understand the risks associated with this decision. Without further legislative or regulatory action taken on the state level, akin to the Civil Service regulations in Keyport, these towns may be stuck between a rock and a hard place.

A copy of this decision can be found here.

Contacts: Edward Purcell, Esq., Staff Attorney, epurcell@njslom.org, 609-695-3481 x137,

Michael Cerra, Assistant Executive Director, mcerra@njslom.org, 609-695-3481 x120.

 

Only Three States Will Participate in USDA Pilot. Help Make New Jersey One

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We need your help to help needy New Jersey families to more easily access Federal benefits. The U.S. Department of Agriculture’s (USDA) plans to launch a two-year pilot to enable Supplemental Nutrition Assistance Program (SNAP) participants to purchase their groceries online. Senator Cory Booker is leading a push to make our State a part of that pilot. We’ve put together a fact sheet on the SNAP pilot program, for further details.

Each day, thousands of New Jersey residents struggle to put healthy food on the table for their families. As of July 2016, there were 858,572 persons in New Jersey receiving SNAP benefits, which is approximately 10 percent of our state’s population.  A significant number of your constituents are dependent on these benefits to provide nutritious and affordable food for their children and families. According to the USDA, 524,000 individuals, or 6 percent of New Jersey’s population, live in food deserts with in little access to healthy food options.

New Jersey is an ideal candidate to help the USDA test and improve the SNAP online transaction system, prior to expanding to the entire United States.  Our state’s unique range of urban, suburban, and rural communities, the state’s demographic diversity, and New Jersey’s established Electronic Benefit System make New Jersey well-equipped to support the USDA’s pilot program.

For all of those reasons, we will ask USDA Secretary Tom Vilsack to include the Garden State in the SNAP pilot. The more New Jersey Mayors contacting Secretary Vilsack, the better our chances.  You can access a Sample Letter on our website.

Word  http://www.njslom.org/sample-snap-pilot-letter.docx

PDF  http://www.njslom.org/sample-snap-pilot-letter.pdf

Thank you for your consideration.

Contact: Jon Moran, Sr. Legislative Analyst, 609-695-3481 x121, jmoran@njslom.org

 

 

 

Yes on Public Question #2 and Dedication of Transportation Funding

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On Friday October 14 the Governor signed PL 2016, c. 56 and PL 2016, c. 57, bills which reauthorized the Transportation Trust Fund (TTF).    The League long sought the reauthorization of the TTF as well as the doubling of the portion of the TTF that goes to counties and municipalities, which is part of the new law.     Now with that funding in place, New Jersey voters will cast their ballots on Public Question 2, the “New Jersey Dedication of All Gas Tax Revenues to Transportation Amendment,” regarding the funding of transportation projects.

Summary

Passage of the question would amend Article VIII, Section 11 of the New Jersey State Constitution to dedicate all revenues generated by the gas tax for transportation projects.   Essentially, the proposed constitutional amendments would lockbox gas tax revenues for transportation projects and not subject them to the annual appropriation process.

Passage of Public Question 2 would secure all gas tax revenues for the TTF.

Background

While the State Constitution, currently, dedicates most of the revenues derived from taxes on motor fuels and petroleum products to the TTF, it leaves some in the uncertain hands of future State officials. That means that some of these dollars could be diverted away from State – and local – transportation projects and spent elsewhere.     Thus, the purpose of the proposed amendment is to assure additional funding to the State’s Transportation Trust Fund (TTF) and to assure the public that all such revenues will be constitutionally dedicated for transportation purposes.

The interpretative statement reads,

This amendment would dedicate all of the revenue from the State tax on motor fuels to the Transportation Trust Fund. The current dedication is 10.5 cents per gallon on gasoline and diesel fuel. The amendment would include an additional three cents of the tax on diesel fuel that is not currently dedicated. The total revenue from the tax on motor fuels this fiscal year is estimated to be $541 million. The amendment also dedicates all of the revenue from the tax on gross receipts of the sale of petroleum products to the Transportation Trust Fund. The current minimum dedication is $200 million per year. This fiscal year, the revenue from the tax on gross receipts of the sale of petroleum products is estimated to be $215 million. The amendment does not change the current tax on motor fuels or petroleum products gross receipts. The dedication to the Transportation Trust Fund ensures that the revenue is only used for transportation purposes.

Here’s why we think a yes vote is critical. New Jersey’s infrastructure has long been falling apart. The American Society of Civil Engineers released an Infrastructure Report Card this summer giving our roads and bridges a D+ grade, and years of borrowing left the fund bankrupt.  Without a long-term solution, local property taxpayers were going to be on the hook for millions in much-needed improvements to local roads and bridges. Recently, the Governor and the Legislature came up with a plan that not only provides billions to fix our infrastructure, but also doubles the amount of local aid towns and counties will receive to fix their infrastructure.   Infrastructure upkeep is a vital public safety function that must be sustained and the doubling of the funding to local governments also means that funding does not need to rely on property taxes.

Thus, this is property tax relief and if State funding for transportation is not constitutionally dedicated, it may be reduced down the road, with the result of costs falling on property taxpayers.

In 2014, we surveyed League members to get their thoughts on a number of Transportation Trust Fund renewal options. One of our questions asked if they would support an amendment to the State Constitution to prevent, as much as possible, future Legislatures and Administrations from using Transportation Trust Fund revenues for anything other than transportation capital projects. Overwhelmingly, they supported the option to constitutionally dedicate TTF revenues for such work.  Over 80% of the League members who responded registered “Strong” support and another 11% were “Somewhat” supportive.

One question and concern the League has been asked regards increases or decreases in the gas tax that could result from the ballot question.   To clarify, the question will not raise (or lower) the gas tax, regardless of the outcome.     As noted, the new law increased the gas tax by $0.23, from the current $0.14, effective November 1, $0.37.    The actual amount of the gas tax would continue to be determined by statute.   Public Question 2 instead intends to assure that all gas tax revenues are used for transportation purposes.

So while the TTF reauthorization is now law, it is not the end of the road. Voters still must take the final step in ensuring that all of these dollars actually go towards fixing our roads, bridges, and railways.

No one wants to pay more at the pump. But there should be consensus that all revenues from the gas tax, whatever that tax may be, should go for transportation purposes. Voting yes on Question #2 will guarantee that.

For more, see:  https://ballotpedia.org/New_Jersey_Dedication_of_All_Gas_Tax_Revenue_to_Transportation,_Public_Question_2_(2016

Contact:

Michael F. Cerra, Assistant Executive Director, 609-695-3481 x120, mcerra@njslom.org

 

A-543/S-371 Highway Safety Act Amendments Will Improve Emergency Response

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The League of Municipalities join the First Aid Council in supporting A-543 and S-371, companion bills which will revise the standards and requirements for volunteer and non-volunteer first aid, rescue, and ambulance squads under the New Jersey Highway Traffic Safety Act of 1987.

The League sees this legislation as advancing two important public policies. First, it will help to ensure citizens and visitors that, should the need arise anywhere in our State, they will be able to count on effective, responsible and professional care from trained and able EMTs. Second, it will do so without imposing any unnecessary burdens on the time and resources of our highly valued and highly motivated volunteers.

This legislation would require any applicant for EMT-Basic certification to meet requirements promulgated by the Commissioner of Health. Those requirements would, in turn, comply with the uniform standards promulgated by the United States Secretary of Transportation in accordance with the “U.S. Highway Safety Act of 1966,” as amended and supplemented. The bills would require that the officers of a local EMS squad notify the governing body of the host municipality of the training certifications and certification expiration dates for each member, along with proofs of inspections for all equipment.  The bills additionally specifies that no first aid, rescue, or ambulance squad may provide basic life support services unless that squad is inspected and certified or otherwise authorized to do so by the Office of Emergency Medical Services in the Department of Health, or is inspected and certified as a member in good standing of the New Jersey State First Aid Council.

It is helpful to note the requirements have some time to be phased in. The bills give the Department of Health seven months to prepare administratively for the new requirements that could address a big concern for the training schedules of these time pressured volunteers.

Further, the bills would revise the definitions of a “volunteer first aid, rescue, and ambulance squad,” and “non-volunteer first aid, rescue, and ambulance squad,” to bring the meaning of those terms into conformance with current New Jersey practice.  And the bills would, for the first time, provide a definition of “basic life support,” which is not currently defined in the New Jersey Highway Traffic Safety Act of 1987, to mean a basic level of pre-hospital care which includes patient stabilization, airway clearance, cardiopulmonary resuscitation, hemorrhage control, initial wound care and fracture stabilization and other techniques and procedures authorized by the Commissioner of Health. The bills provide further requirements regarding the staffing of vehicles transporting patients and regarding the drivers of such vehicles.

Volunteerism and local flexibility have allowed numerous New Jersey municipalities to meet the need for efficient and effective emergency medical services for decades; and, they have never been more important than they are now, in the midst of unprecedented fiscal challenges and constraints. We believe that these bills will improve the prospects for the future of local emergency response volunteerism and promote better training for both volunteer and non-volunteer first responders. We salute the sponsors for their leadership on this matter and we strongly support A-543 and S-371.

Please, ask your legislators to join as co-sponsors of this common-sense initiative.

Contact:    Jon Moran, Sr. Legislative Analyst, jmoran@njslom.org, 609-695-3481 x121.

Atlantic City 5-Year Recovery Plan Advances

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On Wednesday,  Atlantic City Mayor Don Guardian and Council President Marty Small presented the City’s 5-year recovery plan to avoid further State intervention before the Assembly Judiciary Committee. The presentation included a detailed briefing by the City’s respected consultants on economics, structural challenges, revenues, legacy liabilities and much more.

The plan document may be found here:

 http://www.cityofatlanticcity.org/docs/20161025101809-5.pdf

At the conclusion of the hearing, the Committee members gave positive remarks on the work done by the City in a short window of time.  Of particular importance about the City’s plan was its ability to balance the budget through reduction of expenses, leverage local government assets while retaining control locally, and balancing the budget while planning for steady reduction in State assistance through transitional aid.

The same plan was presented to the Department of Community Affairs (DCA)  on Tuesday.     The DCA has until next Tuesday to accept or reject the plan. Failure to accept the plan could result in a State takeover.

Contact:   Michael F. Cerra, Assistant Executive Director, 609-695-3481 x120, mcerra@njslom.org.

Time to Dispose of E-Waste

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Update:  January  9, 2017

We’re pleased to report the Governor has signed S-981 into law.  For more, click here to see our January 9, 2017 update. 

Update, December 7:

On November 21, A-2375 passed the General Assembly by a vote of 60-12.    The Senate companion, S-981 previously passed the State Senate.

The legislation now awaits action by the Governor.

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The League supports S-981 and A-2375, regarding so-called “e-waste.”   Specifically, this legislation would require each manufacturer of “covered electronic devices” to provide for the collection, transportation, and recycling of its market share in weight of all covered electronic devices collected in a program year.   Similar legislation advanced in the lame duck session but was pocket vetoed by the Governor.

The “Electronic Waste Management Act” intended to require manufacturers to provide for the recycling of residential covered electronic devices at no cost to taxpayers.  Unfortunately, despite the best of intentions, it has not worked out that way.   Local governments have wound up subsidizing the program with taxpayer dollars in order to ensure that 100% of the material collected is properly recycled.      A-2375 intended to address this inequity for taxpayers.

We are further encouraged that the fiscal analysis prepared by the Office of Legislative Services (OLS) anticipates costs savings to local governments, if A-2375 were to be implemented.

A-2375 will ensure that manufacturers provide for a “free and convenient” recycling program for all of the covered electronic devices that are collected and further eliminate the need for local governments, and by extension our property taxpayers, to either absorb these costs or eliminate their programs.

S-981 has passed the State Senate and joins its companion bill A-2375 at second reading in the Assembly, which means it can be posted for a final vote.   Please contact your Assembly representatives and the Governor’s Office and ask for their support of S-981 and A-2375.

Contact:   Michael F. Cerra, Assistant Executive Director, 609-695-3481 x120, mcerra@njslom.org.

The Art and Science of Reverse Revenue Sharing

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Property Tax Relief funds are meant to help municipalities relieve property tax burdens. But in New Jersey, that’s not always the way things happen. All too often, State-level policymakers have redirected relief resources to pay for other priorities.

In 1997, the Energy Tax Receipts Property Tax Relief Fund (ETR) replaced Public Utility Gross Receipts and Franchise Taxes (Utility Taxes). Those taxes on regulated public utilities were originally assessed and collected at the municipal level. In the early 1980s, for its own benefit and for the convenience of the tax paying utilities, the State became the collection agent for these assessments. The law that effected this change promised that the proceeds would be distributed back to the municipalities, which provide access to public rights of way and other services to utility facilities. (And only because of that access, and thanks to those services, utilities derive their profits.)

The State of New Jersey neglected that commitment, immediately diverting large and growing portions of the Utility Taxes to its own general fund.

Modernization and deregulation led to a major reform of utility taxes in 1997. That reform law validated and, supposedly, capped the State’s annual percentage of the proceeds. At the League’s urging, future ETR municipal property tax relief funding was protected by the, so-called, poison pill. The ETR “Poison Pill” provides that, if the State does not appropriate and distribute Energy Tax Receipts Property Tax Relief funding, in any year, in accordance with statutory requirements, then the State forfeits the right to collect the corporation business tax (CBT) from all corporate taxpayers that are not public utilities for that tax year.

In order to explain what would later happen with the ETR, you need to know a little bit about New Jersey’s other significant municipal property tax relief program – the Consolidated Municipal Property Tax Relief Aid (CMPTRA) program.

Throughout the first nine decades of the Twentieth Century, municipalities had access to various sources of revenue. Like the Utility Taxes, over time, the State made itself the collection agent for many of these municipal assessments. In the SFY 1996 Budget, the Whitman Administration decided to ‘consolidate’ fourteen municipal property tax relief programs. Each of CMPTRA’s component parts was distributed according to state established formulas. And many of those parts were extensions of taxes that had formerly been assessed and collected at the municipal level. These include the Financial Business Tax, the Insurance Franchise Tax, the Railroad Class II Property Tax, the Business Personal Property Tax, the Corporation Business Tax on Banking Corporations, as well as State Payments in Lieu of Property Taxes (PILOTs) on State owned properties and buildings (which, by the way, had been underfunded for several years).

Like Utility Taxes, these were all municipal revenue replacement programs. Absent these programs, local residents and businesses would have needed to cover local revenue losses caused by State actions. Revenue replacements were not meant to make things better for municipal property taxpayers. They were only intended to keep things from getting worse. In the first year, CMPTRA provided $861.4 million of property tax relief.

Due to rising costs, municipalities often need to spend more in successive years in order to maintain services and programs at a steady level. When the State provides flat property tax relief, the difference will, in many cases, have to be made up by increases in property taxes or reductions in existing services.

Realizing this, active members of the League of Municipalities battled, for years, to convince State Legislators to provide some annual inflation based increases in property tax relief funding programs. In 1999, we were successful in winning such adjustments for the Energy Tax Receipts Property Tax Relief program and in the Consolidated Municipal Property Tax Relief Aid. Because ETR distributions are protected by the “Poison Pill,” the State has needed to annually increase municipal ETR funding (or, at least, to appear to do so). Because there are no consequences for the State, should it fail to annually increase CMPTRA distributions, guess what happened next?

Beginning in SFY 2002, and in almost every year since, the State has passed budgets that ignore the law calling for inflation-based adjustments to CMPTRA. (Each annual State Budget can include provisions that supersede, during that Fiscal Year, previously passed funding laws.)   Instead, CMPTRA dollars were used to fund ETR inflationary adjustment.

The way this works is testimony to the creativity of State budget-makers.

Those budgets distributed CMPTRA funding according to CMPTRA (Revenue replacement) formulas to CMPTRA recipient municipalities. But, the State called the CMPTRA monies Energy Tax Receipts. On paper, ETR distributions increased by the rate of inflation. In reality, local budgets got flat funding. That has been the usual case, right up to and including the current State budget, except in the years when more is subtracted from CMPTRA than is added to ETR.  In those years, the State used local property tax relief money to address State level needs.

And that’s what happened in 2008, 2009 and 2010. In those years, the State saw its own-source revenues stagnate in response to the Great Recession. State budget-makers solved their problem, in part by ‘repurposing’ local property tax relief. And, over those three years, local budgets absorbed total losses of about $320 million. That $320 million loss is not a one-time loss of property tax relief. It has been reenacted, every year since 2010.

Remember that CMPTRA distributed over $861 million to the cause of local property tax relief in its first year (SFY ’96). In the State’s current budget, thanks to twenty years of State gamesmanship, including three years of actual reductions, CMPTRA will provide only about $280 million of help to municipal budgets. And a source of non-property tax revenue that was supposed to increase annually by the rate of inflation has been steadily drained.

We remember that Property Tax Relief has always been the purpose of the ETR. We know what the PTR in CMPTRA means. Now is a good time to remind the folks in the Statehouse.

Contact: Jon Moran, Sr. Legislative Analyst, jmoran@njslom.org, 609-695-3481 x121