Dear Mayor:

Here’s a recap of some important matters that emerged over the past few day.

I. League President Testifies of State Budget Proposal

On Tuesday and Wednesday, the Hon. David DelVecchio, Mayor of Lambertville and President of the State League of Municipalities, testified before the Assembly Budget Committee and the Senate Budget and Appropriations Committee, regarding Governor Corzine’s proposed State Budget for 2007-2008.

Mayor DelVecchio commended the Governor on his proposed 2% increase in general municipal relief funding – the first increase in five years. He, likewise, expressed support for the proposed increase in funding to facilitate service sharing arrangements. Mayor DelVecchio also carefully explained to the Committee the connection between municipal property tax relief funding and municipal property taxes.

He asked the Committee to increase the Governor’s proposed funding for Extraordinary Aid, which is annually awarded, based on need and the availability of funding. The program is slated to be cut by $18 million (under the Governor’s proposal). That means, most likely, that fewer municipalities will get any of this emergency funding and that those who do get funding are more likely get less than they need. We urged the Legislature to fund Extraordinary Aid at, at least, last year’s level.

Mayor DelVecchio also stated, “Another recurrent problem needs to be considered, as you shape the State’s spending plan. In recent years, many municipalities located along rivers and streams have experienced severe flooding incidents. These floods … have caused millions of dollars worth of damage to municipal transportation and environmental infrastructures. Accordingly, we respectfully ask you to set aside substantial funding for a new grants program, to be used to defray the impact of these incidents on local property taxpayers.”

The full text of Mayor DelVecchio’s statement is available on our website at www.njslom.com.

II. Governor Signs A-2, Creating the Office of the State Comptroller

On Thursday, Governor Corzine signed into law A-2, which would create the Office of the State Comptroller.

While the current bill does represent a significant improvement over previous versions, we fear it is still too vague and open to reinterpretation by future Administrations. The bill will create a powerful new bureaucracy – accountable only to the Governor - that could duplicate current state regulation of local fiscal affairs; slow down and add uncertainty and costs to local contracts; and will cost the people of New Jersey at least $9 million from day one.

We have no objections to a State Comptroller. But, we hoped to be assured that no new administrative burdens are imposed on local governments, which are already subject to stringent financial regulation by the Division of Local Government Services, in DCA, and to substantial regulation in other areas by various State Departments, Divisions, Offices, Boards and Commissions. And, we also hoped to be assured that all of the bill’s costs are accurately estimated and that the benefits to be provided justify those costs.

Historically, New Jersey laws have traditionally provided a higher level of fiscal oversight of local units than other states. We are the only state that requires budget reviews as a preventive oversight measure. In recognition of these facts, one of the Senate amendments provides that the Comptroller will not, as a general rule, impose new audit requirements on local government. Instead, the Comptroller will ‘audit the audits.’ In other words, the Comptroller will review the audits that we must already experience to see that they were done thoroughly and properly. The Comptroller could conduct a fresh audit, if asked to do so by, e.g., the Department of Community Affairs.

For more information on these two issues, contact Jon Moran at 609-695-3481, ext. 121.

III. Governor Signs ‘BRAC’ Bill

Yesterday,  Governor Corzine signed A-15/S-12, which establishes a commission to make recommendation on local consolidations.

A-15/S-12 is an improvement over previous versions of this concept since it guarantees the participation of voters and does not include penalty provisions upon taxpayers.   And it is thanks to the efforts of local officials and the League that the people will have the final say on consolidation and that they will not be punished if they choose to oppose consolidation.

Despite these improvements, the League maintained its opposition to the concept in general and to A-15 & S-12 in particular for a number of reasons.   Most importantly, the League opposes A-15 & S-12 because in no way, shape or form can these bills be construed as property tax reform.   If anything, the so-called BRAC is a distraction from the efforts to achieve property tax reform.

While the Legislature has yet to address the real cost drivers of the municipal portion of the property tax levy, are we to believe that a new layer of government, a new bureaucracy, is needed to recommend how to achieve greater efficiencies?  This is an inefficient and ineffective way to seek efficiency. For more information on this, contact Michael Cerra at 609-695-3481, ext. 120.

Very truly yours,

                                                                        William G. Dressel, Jr.
                                                                        Executive Director