NJ Spotlight: Property Tax Relief? Not While the State Diverts Local Utility Taxes

For years, the state has skimmed money from special accounts in its fiscal budget to help balance the books.

Perhaps no one has suffered more from the accounting sleight of hand than local governments, reports Tom Johnson in NJ Spotlight.

In the past decade, have been denied hundreds of millions of dollars in utility taxes that should have helped municipalities provide property tax relief to residents.

Now, local governments are pushing back. Strapped by a 2 percent cap on budgets, they are lobbying legislators to end the practice, which involves the state collecting local utility taxes instead of the municipalities and keeping much of the proceeds to balance the state budget.

"It's time to right this wrong," Mount Arlington Mayor Art Ondish told the Assembly Budget Committee, urging them to begin sending more of the money collected by assessments on utility poles, wires, and other equipment back to where he says it belongs -- local governments.

The revenue local governments receive from those assessments has been steadily declining: by $28 million in 2008, by $32 million in 2009, and by $217 million in 2010, according to Ondish, who is president of the New Jersey State League of Municipalities.

The skimming is almost rite of spring. Governors and lawmakers see a large pool of funds, and divert it to plug holes in the budget, without the inconvenience of raising taxes and fees at other levels.

Continue reading the full story in NJ Spotlight.

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