How Does this Add to the Property Tax Dilemma?
Currently, the largest portion of money received by municipalities from the State is a partial replacement for funds that were originally collected by municipalities, and were direct sources of municipal revenue. From PUGRAFT, now distributed as Energy Tax Receipts Property Tax Relief, to Consolidated Municipal Property Tax Relief Aid (COMPTRA), which was originally Business Personal Property Taxes, Financial Business Taxes, and Class II Railroad Property Taxes, all of these revenue sources were originally sources of revenue for municipalities, and these revenue sources helped to offset revenue derived from property tax payers.
After the State diverted local energy taxes for the State’s general fund, they increased the State’s Sales Tax with a portion dedicated towards providing property tax relief. The State is now blaming local government for its years of mismanagement at the State level; while municipalities have had to eliminate or reduce services, increase fees or property taxes, or a combination of such to off-set the diverted revenue.