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Open Letter to the Administration and the State Legislature Urging Restoration of Energy Tax Receipts Property Tax Relief Fund
Dear Honorable Members of the Senate and General Assembly:
As fellow New Jersey elected officials, we strongly urge the full restoration of the Energy Tax Receipts Property Tax Relief Fund to municipalities and encourage you to incorporate this essential municipal funding into the 2024 Fiscal Year New Jersey State budget. This funding is a necessary first step in addressing property tax affordability in the state.
We appreciate that the 2023 Fiscal Year New Jersey State budget included a $75 million allocation in new funds, identified as the Municipal Relief Fund. This was a positive first step in the right direction after years of neglecting the restoration of crucial funding, but a one-time allocation does not address the ever-growing financial gap.
The allocation of over $350 million into the 2024 Fiscal Year New Jersey state budget would restore funding, which has been annually diverted from dedicated municipal funding programs–the Energy Tax Receipts Property Tax Relief Fund (ETR) and the Consolidated Municipal Property Tax Relief Aid (CMPTRA). For years, though, State officials from both sides of the aisle have diverted funding from Energy Taxes to plug holes in the State budget and to fund State programs. The restoration of this funding to New Jersey’s municipalities is long overdue. Allocating this vital funding would eventually bring funding for all municipalities back to 2008 levels.
Taxes on gas and electric utilities were originally collected by the host municipalities, and when the State made itself the collection agent for these taxes, it promised to return the proceeds to municipalities for property tax relief. Just as municipalities collect property taxes for the benefit of school districts, counties, and other entities; the State is supposed to collect Energy Taxes for the benefit of municipal governments.
Local officials are clearly committed to limiting their reliance on increased property taxes while bearing the responsibility to provide for local needs including critical public safety and health needs of the community. The overall trend has been a slowdown in the growth of the average property tax bill since the 2% property tax levy cap. In 2022, the average local property tax bill increased by 1.9%.
We thank you for your consideration and for hearing our concerns and urge your immediate action as part of the 2024 Fiscal Year New Jersey State budget process.
Very truly yours,
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