Each election year, the New Jersey State League of Municipalities’ magazin
e, NJ Municipalities, puts a spotlight on the candidates for Governor highlighting each candidate’s stances on topics of critical importance to local government officials. The following are questions from the League and answers from candidates Jack M. Ciattarelli, former State Assemblyman, and U.S. Representative Mikie Sherrill.
NJLM: The fourth round of Affordable Housing regulation is underway. Over 430 municipalities are seeking to comply with the provisions of A-4. Going forward, what is your plan for affordable housing? How will your Administration work with local governments to comply with the current court-imposed affordable housing obligations? What tools do you support that can be reinstated or created to help municipalities comply with their affordable housing obligations?
Jack Ciattarelli: I will work to make New Jersey more affordable for all, and that includes taking a better and smarter approach than exists today on affordable housing for low- and moderate-income families. I oppose mandated housing construction in every municipality as this has resulted in residential overdevelopment in communities that have limited infrastructure, no mass transit, and very few, if any, low-to-moderate income job opportunities.
Further, the current model destroys open space, chases wildlife from its habitat, increases pollution from more idling cars on already congested roads, creates more local flooding from stormwater management issues, and drives up property taxes due to endless legal fees and additional local services.
I will take a regional approach that fosters population growth in areas with the necessary infrastructure such as transit hubs and urban centers, where self-sustaining local economies are desperately needed. I will reinstate regional contribution agreements (RCAs) and use quotas based on statistics from the state Department of Labor and Workforce Development to determine housing need. This smarter approach must come via a real legislative solution–not more court action–and, if need be, a constitutional amendment.
My administration’s Department of Community Affairs will work with municipalities to ensure housing location and construction decisions are made based on sensible planning principles and solid data. I will certainly not allow active, generational family farms to be threatened with eminent domain over state-mandated housing, as occurred in Cranbury.
Mikie Sherrill: Expanding housing opportunities that families, seniors, veterans, and young people can afford while protecting New Jersey’s open spaces is a goal I know we all share. It was encouraging to see over 430 municipalities stepping up to participate in the newly created program to increase access to housing options that are more accessible for working families. As Governor, I will work collaboratively with municipalities to help them meet their housing obligations and lower housing costs by crafting further incentives and tools for towns to employ and making resources available to support municipal housing programs and projects.
First, I will end diversions from the NJ Affordable Housing Trust Fund, a key tool in helping towns expand access to housing that suits their community’s needs. I will ensure that these funds are available for municipalities to make homes more affordable, drive investments into vacant, abandoned, or neglected properties, and keep property taxes down by reducing fiscal pressures on their budgets.
I will also provide planning assistance and incentives with local input to encourage innovative zoning and redevelopment strategies to help towns design their communities for the future and add a range of housing options, including starter homes and accessory dwelling units, to increase housing affordability for all families while protecting open spaces and meeting the specific needs of each community. Similarly, I will work collaboratively with local governments that seek to redevelop underused and neglected properties, and to create transit-oriented development, which will expand access to affordable housing options and generate local property tax revenues.
Lastly, I will work with municipalities to identify ways that we can fairly and effectively address infrastructure impacts necessitated by new housing construction, such as sewer and water systems and roadways.
State government needs to plan smarter, improve coordination and consistency across all state departments, and partner with our local governments to most effectively achieve our critical goal of making housing more affordable in New Jersey.
NJLM: Over the last century, many taxes that had been collected by local governments were either abolished or are now collected by the State. In most cases, when these changes were made the State promised to reimburse municipalities either the amount they had been collecting or the amount that the State would collect. But historically that commitment was not always honored. Today, Energy Tax Receipts and Consolidated Municipal Property Tax Relief generally represent the largest non-property tax source of revenues for New Jersey municipalities. Do you support the restoration of funding to local governments diverted from the Energy Tax Receipts?
MS: Diversions from the Energy Tax Receipts are an added burden to towns, which face the challenge of keeping property taxes down while delivering quality critical services that include police, fire, and emergency medical response. Towns today are confronted with rising expenses from inflation, solid waste and recycling collection costs, state pension payment hikes, and skyrocketing healthcare costs, as well as equipment purchases and infrastructure improvements to address state environmental mandates.
Energy Tax Receipts are funds that the state had begun collecting on behalf of towns for greater efficiency, but it is now business as usual for the state to hold onto the money for other purposes. Local governments are facing unprecedented challenges and deserve the resources needed to help meet those challenges and deliver for their residents. Although our state is facing critical budget challenges in the years ahead, I recognize that Energy Tax Receipts were collected for municipalities, and I intend to work with municipalities to find ways to alleviate fiscal pressures at the local level.
JC: I do support the eventual end to the diversion of Energy Tax Receipts, but the budget I will inherit as Governor will not allow that to be accomplished in the near term. It is dangerously out of balance, and rife with diversions of various funds from their intended purposes to prop it up. Even members of Gov. Murphy’s own cabinet have criticized these diversions.
Along with the long-time diversion of Energy Tax Receipts, this budget includes a roundly denounced diversion of $45 million in legal settlement money intended to go toward opioid harm reduction and other related purposes. Also widely criticized is the $125 million diversion from the Affordable Housing Trust Fund.
The point is that this budget is so completely unstable that, beyond its generally acknowledged structural deficit of about $1.5 billion, I’m reliably informed that the actual structural deficit is closer to $4 billion. As Governor, I will have to triage the budget to meet the legitimate policy goals of balancing recurring revenue with necessary spending, providing tax relief to overburdened taxpayers, and addressing the serious affordability issues that are causing people to flee the state.
It is only after the State budget is reformed that the full amount of Energy Tax Receipts can be provided to local governments and state aid can be gradually increased without creating a budget gap that others would fill with another tax, which I will not do. It’s unfortunate that the budget has been expanded by about 70% over the past eight years rather than capped at inflation and streamlined, as I will do.
NJLM: The Resilient Environments and Landscapes (REAL) rule proposal by the Department of Environmental Protection are sweeping changes to land use regulation. While the proposal has been scaled back as of this writing, local governments, particularly those in coastal areas, will need to carefully evaluate how these changes will affect their development plans, infrastructure needs, and economic strategies. How will you balance climate resilience with increased development pressure, including from the latest round of affordable housing obligations?
JC: The significant changes made to the REAL rule proposal following the initial public comments clearly show that they were not well thought out to begin with, and the revised proposal isn’t much better. In this area as in others, State policy must be based on real science, not political science, and I am troubled that these proposed regulations are based in part on decades-out projections with a 17% confidence level. No thinking person would make a major purchase with a 17% confidence level, and the State shouldn’t impose higher costs and expanded bureaucracy on its residents and businesses in that case, either.
As Governor, my main goal will be to make our state more affordable for residents and more attractive to businesses. These regulations would take us in the other direction by making the state less affordable in housing costs, building costs, and infrastructure development expenses and obstacles.
If these regulations are enacted by the outgoing administration, I will immediately suspend them and direct my Commissioner of Environmental Protection to go back to the drawing board. My direction will be to develop reasonable and necessary regulations to protect against sea level rise based on the principles of sound science and my vision for a New Jersey that is economically competitive with other states, affordable for residents and businesses, and free of unnecessary and unmanageable state mandates and excessive red tape.
MS: With the Atlantic Ocean off our coast, the Delaware River to the west, and numerous rivers, lakes, and bays in between, New Jersey communities are particularly vulnerable to flooding. Flooding puts our residents and first responders at risk, devastates small businesses, and causes widespread damage to our infrastructure. And when we are hit with a major storm, it’s the taxpayers and property owners who are ultimately left footing the bill. We need to protect our residents and communities from flooding, the threat of rising sea levels, and once-in-a-generation extreme weather events that seem to be hitting our state every year.
New Jersey must strike a balance in driving innovation and economic growth while also preserving our open spaces and the natural resources that we love and enjoy. A more coordinated approach across all state departments will more effectively advance this balanced approach to significant state challenges and goals.
I was pleased to see that legitimate concerns raised during the rulemaking process were considered and that the proposal has been revised. The fact is, we all must plan for a more resilient future that can withstand the impacts of climate change, preserve families’ quality of life, and keep residents and properties safe. Smart development is necessary to meet the housing and economic needs of our state while protecting open spaces. I will work collaboratively with towns to prioritize the redevelopment of existing properties, whether underutilized or in need of cleanup like brownfields, which will allow us to preserve open spaces and avoid flood-prone areas.
NJLM: Recent policy decisions have resulted in laws and regulations being adopted that mandate municipalities play a bigger role in the planning, implementation, and enforcement of climate resiliency efforts. What will your administration do to assist local governments to comply with the State-mandated resiliency planning and implementation requirements?
MS: Mitigating the impacts of climate change will require leaders at all levels of government working together. I have a track record of working with towns on resilience measures like flood mitigation. Some of our flood problems have common-sense solutions. Six mayors from communities along the Whippany River in my congressional district came to me with a presentation on long-neglected blockages and erosion, causing the river to overflow during major storms. Together, we got to work, and I secured federal funding to clear impediments and restore streambanks. In other communities, aging stormwater systems are no longer adequate to handle increased levels of rainfall. I worked with Maplewood to fund capacity upgrades in an area that was tragically impacted by Hurricane Ida.
Towns cannot tackle the issue alone. The State certainly has a role to play in helping towns meet the challenges we face from climate change, including State requirements for municipal stormwater permits. The State should work closely with municipalities to craft and provide clear and fair requirements and guidelines. It must identify where it expects to see development and where we need resources to reduce flood risks and further the goal of resiliency in New Jersey. The State will also have to step up and invest in local resiliency projects. As Governor, I will work in partnership with municipalities to plan and build our communities for the future and help them with their critical role in securing our communities for the future.
JC: Having served in municipal and county government, I oppose unfunded State mandates on local government and will repeal any regulations that impose them.
The Community Hazard Assistance Mitigation Program (CHAMP) under the Resilience Infrastructure Bank, part of the Infrastructure Bank or I-Bank, will continue to provide low-interest loans to local governments to pay for hazard mitigation and resilience projects. However, my administration will take a smarter, more practical approach to resilience planning.
Unlike my predecessor, I will not place unreasonable burdens on local governments that would hurt municipalities through lost ratables, possible tax appeals and obstacles to infrastructure projects, and exacerbate the crisis in the housing market by increasing construction costs.
Our shore communities, a major economic engine for New Jersey, will be particularly hard hit by the proposed new state mandates as they continue to recover from the loss of tourism during the pandemic. Increasing the cost of housing will cause tourists to seek less expensive alternatives and could even cause homeowners to do the same.
As Governor, I will protect the environment without resorting to a top-down approach that treats local governments as underlings rather than partners. My administration won’t merely assist local governments in dealing with State-created problems, but rather will work collaboratively on environmental protection, resiliency, and other issues.
NJLM: With multiple double-digit increases and more than 10% of local government entities exiting the State Health Benefits Program (SHBP) since the end of 2020, the SHBP requires a significant reimagining to ensure that local government employers and employees have access to reasonably priced health insurance. Since there are different programs for State employees and local government employees, a two-tier system has developed where local government employees have paid significantly more to obtain health insurance than their counterparts in State government. Please detail your plans to reimagine the State Health Benefits program that ensures solvency, access, and affordability that are fair to local government employers and employees.
JC: The deteriorating financial condition of the SHBP has gone unaddressed by the current administration, while even Republicans publicly supported some reforms proposed by public employee unions that the administration has ignored. These include establishing standard pricing for out-of-state hospitals that charge much more for surgeries than Medicaid and Medicare pay for similar operations.
Better, more professional management of the SHBP could have helped avoid the current crisis. Depletion of reserves led to two years of hikes greater than 30%. This problem is exacerbated by the difficulty in building reserves in the future. With the SHBP spending 97 cents of every dollar on medical costs, very little is left for increasing reserves while paying for administrative expenses.
Overall utilization has increased significantly, and costs must be contained and more fairly shared with taxpayers. SHBP members sometimes get prescription drugs with no out-of-pocket costs, and medical copays have remained flat for many years. That’s not fair to the taxpayers who generally don’t enjoy such generous benefits themselves.
We need to streamline the program by reducing the number of plans and incentivize selection of high-deductible plans. We can save more through substantial claims review, audits of the highest-cost covered medications, and in particular cost controls for weight-loss GLP-1s and other drugs.
Government is slow to innovate or at least borrow from innovations proven successful in the private sector. As a businessman, when I’m Governor, I’ll apply more businesslike practices to State government to make it more efficient and less expensive.
MS: The rising cost of healthcare is a significant driver of property tax increases and an enormous challenge for municipal budgets. Not only that, these rising premiums are a major financial burden to the public employees who provide critical services and keep our communities running safely and smoothly. And new legislation from Washington, D.C., that is gutting Medicare, Medicaid, and child health care programs can be expected to further burden all health insurance programs.
Across New Jersey, many towns have left the State Health Benefits Program in an effort to contain costs, but this is not sustainable since those that remain are left with higher premiums. With the local portion of the State Health Benefits Program risking a potential death spiral, we need serious reforms to deliver savings for both taxpayers and public workers.
One place we can start is through expanded independent third-party auditing of SHBP claims and claw-backs of overpayments. While this currently exists in a limited form, we can save a significant amount of taxpayers’ money by reviewing additional claims, especially for out-of- state visits and procedures.
As Governor, I will take every step necessary to drive down costs and ensure that the plan is affordable for municipalities and their workers. Municipalities will be a key partner in my effort to address this crisis, which we can only solve with everyone sitting at the table together.
NJLM: What are your long-term infrastructure funding plans that address local roads, transit, as well as sewer and water pipes?
MS: Infrastructure for transportation and basic services like water and sewer are critical for our economy and our quality of life. The fact is, New Jersey led the nation in building vibrant communities with access to good jobs and amenities, but these systems are aging and require upgrades and new investment. I know how challenging it is for towns to shoulder this burden on their own, especially as the cost of providing services rises across the board. In Congress, I’ve prioritized local road and water infrastructure improvements through the Community Projects program, which I’ve used to address major needs in our towns without increased property taxes. In collaboration with local officials, I have delivered federal funds to upgrade pump stations, lead service lines, stormwater systems, and local transportation upgrades. I also helped pass the Bipartisan Infrastructure Law, a once-in-a-generation investment in our infrastructure. These programs are driving billions of dollars of investment to modernize train stations and bus fleets, update drinking water systems, and replace bridges.
As Governor, one of my biggest priorities will be making State government more efficient, more accountable, and more responsive to the needs of our communities. I will ensure robust levels of funding through the Transportation Trust Fund are available, as well as guidance and technical assistance for implementing projects that make our roads safer and keep traffic moving. I will develop a comprehensive strategy to secure more federal dollars for everything from transit upgrades to water infrastructure. For every dollar New Jersey taxpayers send to Washington, we only get about 70 cents in return. We need a Governor who knows how to navigate federal programs and deliver: and I’ve got a proven track record. I will also work with local communities on Transit Oriented Development, which can provide more convenient transportation options, revitalize downtown areas, lower housing costs, generate ratables, reduce traffic congestion, and create walkable communities. Funds generated through TOD can be reinvested back into the system, including through upgrading train stations and providing more reliable service.
JC: I support a financially responsible renewal of the Transportation Trust Fund, and will continue funding road projects, New Jersey Transit and transportation infrastructure projects through the TTF. My administration will help fund a reformed New Jersey Transit without the “Corporate Transit Fee” that adds to our state’s unattractiveness to businesses and economic investment.
In addition, the I-Bank’s New Jersey Transportation Infrastructure Bank will continue to assist local governments with low-interest loans for transportation infrastructure projects.
While Republicans proposed renewing the TTF using debt defeasance funds and a performance audit of New Jersey Transit, Democrats instead used defeasance funds to prop up a bloated State budget with a structural deficit between $1.5 billion and $4 billion, and failed to require a performance audit that could have resulted in redirecting transit subsidies for use on road and bridge infrastructure. I will work to create the Garden State Transportation Authority, folding New Jersey Transit, the Turnpike Authority, and the South Jersey Transportation Authority into a single governing body appointed by the Governor. The Commissioner of the NJ Department of Transportation will be the Chairman of the Board of the consolidated authority. This will improve coordinated planning so that infrastructure and transit projects are prioritized and implemented efficiently.
The I-Bank’s New Jersey Water Bank will also continue to assist local governments with low-cost State funding for water infrastructure projects.