Towns are short-changed by the state in property tax relief funds

Much to the relief of all taxpayers in Highland Park, Highland Park Council members at recent municipal meetings have been focused on property tax relief. With the mayor leading the way, council is throwing its support behind a state legislative proposal that would force the state to pay municipalities the property tax relief monies owed to them as mandated by the terms of the imposition of an energy use surcharge.

Since 1997, the state has had a property tax relief measure in place that returns money to the municipalities for the purpose of controlling property tax increases. The money sent back to the municipalities comes from an energy use surcharge that residents of the state pay when they pay their utility bills. However, even though the energy use tax has been collected without interruption since 1997, the state has failed to fully implement the property tax relief since 2001.  A bill – introduced by state Sen. Linda Greenstein (D-Cranbury) and co-sponsored by Sen. Peter Barnes (D-Edison), whose legislative district includes Highland Park – would require the state to turn over a portion of the money it owes, and to meet its obligations in full going forward.

“They’ve given us some money over the years,” said Mayor Gayle Brill Mittler. “But if you take a look at what was given to us, compared to what was owed to us just last year, it adds up to over $800,000.”

The money to fund the tax relief is generated by a surcharge tacked onto energy bills from utility companies such as Public Service Electric and Gas Co. The utility forwards the money to the state, which in turn is supposed to distribute the money to individual municipalities as property tax relief that would ease the burden on taxpayers.

The state started falling behind in its commitments to Highland Park as early as 2002, when the borough should have received $1,261,270 but instead got only $1,230,507. That $30,763 shortfall in 2003 grew to $38,007, and continued to increase each year over the next 10 years. In 2014, the state paid Highland Park only $981, 547 with a shortfall of $821,504.

“It galls me to hear Gov. Christie talking about how he’s holding down state taxes,” said Mayor Brill Mittler. “The state owes Highland Park over $5.6 million in back energy tax rebates, and that’s just Highland Park’s share.”

Labeling the property tax rebates a big deal for local taxpayers, who get called upon to make up the difference in the form of higher property taxes, Mayor Brill Mittler reached out to Sen. Barnes to convince him to support the Greenstein bill. Her administration also has been contacting elected officials in other municipalities to generate local support for the rebate bill.

“I plan to reach out the other mayors, one in each county if necessary,” she said. “We need to put pressure on our legislators.”

Even if the bill, S268, were to pass as written, the borough would not get the full $5 million the state theoretically has underpaid the municipality during the past 14 years. The Greenstein legislative proposal only requires that the state settle arrears dating back to 2013, and then to meet its obligations in full going forward.

Ultimately in shifting the money collected from the energy surcharge back into the pockets of the municipalities, the bill would compel the state to find the revenue elsewhere through cuts or perhaps increasing the energy surcharge or even imposing an income tax hike.

Even understanding the fiscal fragility of the state and the problems of forcing the state to live up to its obligations, Sen. Barnes fully supports property tax relief. “The Number One issue in the state of New Jersey is the property tax levy,” Sen. Barnes said. “Any time you run for statewide office, and speak to the residents of a city or any other municipality, they always talk about property taxes.”

Mayor Bill Mittler agreed. “This is important….People need to know why their taxes are going up. Citizens were assessed with the assumption that it would be returned them in the form of property tax relief.”


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