Panel Approves Property Tax Relief Bill Sponsored by Jay Webber

PARSIPPANY — Legislation sponsored by Assembly Republican Jay Webber to provide direct relief to property taxpayers cleared the State and Local Government Committee today. Webber’s bill (A-302) increases money to municipalities from the energy tax receipts program, and requires towns to subtract the additional aid from its adjusted tax levy to benefit property taxpayers.

“It’s time to use the energy tax receipts to provide its intended relief for property taxpayers,” said Webber, R – Morris, Essex and Passaic. “The money was a promise of relief for property taxpayers, and using it for anything else is unacceptable. Restoring funding can keep that promise and begin lowering property tax bills.”

The bill increases the distribution from the energy tax receipts aid. Phased in over a five-year period, the increase restores approximately $331 million in reductions to consolidated municipal property tax relief aid and energy tax receipts.

A-302 IMPLEMENTATION

Year 1: $67,425,727 -(20%)
Year 2: $134,851,453 -(40%)
Year 3: $202,277,180 -(60%)
Year 4: $269,702,906 -(80%)
Year 5: $337,128,633 -(100%)

Data specific for Parsippany-Troy Hills in Legislative District 26:

Assemblyman Webber’s extended comments about the bill, appearing in a weekend opinion piece, are here:

Here is a simple principle: something named a “Property Tax Relief Fund” should do what it says and actually bring relief to property taxpayers. Too often, however, funds collected by our state government for “property tax relief” really just fuel more spending at the local level and bring no real relief for beleaguered taxpayers.

We have seen this with the New Jersey Income Tax, where billions of dollars annually are put into the “Property Tax Relief Fund” and then transferred to local governments, where the money is spent rather than sent to property owners for tax relief. The cruel result of that chicanery is that New Jerseyans are left with both high income and high property taxes.

Another example is the state government’s Energy Tax Receipts Property Tax Relief Fund, which contains the collected fees paid by utilities for usage of public right-of-ways for sewer, water, gas, and electricity lines. As its label suggests, that fund is supposed to provide property tax relief to our residents. But it doesn’t. Instead, for years state government has diverted those energy receipts into its general fund to spend at the state level.

Many municipal officials object to that practice, claiming that those energy receipts should go to their local budgets, ostensibly to reduce the local property tax burden. But that’s not what will happen. If the money is given to municipalities without restriction, the vast majority of it will just be spent, like so much of the income tax dollars that go back to school boards, and property taxpayers will be left out in the cold again.

Local elected officials face many challenges, and no one should minimize the difficulty of their jobs or the significance of their efforts to balance their budgets. It’s understandable that public officials on the local level would be tempted to seek state subsidies to ease their budgetary pressures. But the “it’s-our-money” mindset is wrong and is one of the reasons New Jersey has the nation’s highest property taxes.

There is a better approach. Scheduled for consideration in Trenton next week is a bipartisan bill that I sponsor that would send the energy receipts back to municipalities, but with a crucial mandate: the funds must go to a direct reduction in property taxes. This initiative dictates direct relief for taxpayers, and gives local officials no option to spend the money. It puts taxpayers first, where they belong.

The bill would mean a real cut in the state’s property taxes, not a reduction in their growth. It would provide more than $325 million annually in direct property tax relief from just this one fund — $2.6 million in annual tax relief for Freehold taxpayers; $1.35 million in annual tax relief for Parsippany residents, and $2.3 million annual tax relief for Bridgewater residents, to cite just a few examples.

Sending money directly back to taxpayers (or, better, letting them keep more of it in the first place) is the path to real property tax relief. Sending money from the state to a lower level of government and hoping property taxes decline is not working — and never has. If there is one thing we have learned, it is that when government gets its hands on our money — at any level — it spends it.

Of course, this energy-receipts initiative alone is not a magic-bullet fix for the property tax crisis, and we should not be satisfied with stopping at this one proposal. Nevertheless, this new policy is the first of its kind to dictate that state aid to municipalities translate directly to tax relief for property taxpayers. Also, importantly, the initiative demands a mindset change among public officials who chronically spend taxpayer money and call it “property tax relief.” And with that, the bill holds the hope of even more substantial property tax relief going forward.

For more than a decade, New Jerseyans rightly have cited crushing property taxes as their number one concern. Let’s take the opportunity to lower property taxes now, before even more of our families and neighbors read this sort of opinion piece online from North Carolina, Pennsylvania, or Florida.