Dear Mayor:

The League of Municipalities opposes S-2, which would establish an independent Office of the State Comptroller. It would give this new appointed state government office unprecedented powers to dictate, delay and over-ride the decisions of locally elected and locally responsive public servants.

The Senate is scheduled to vote on this bill tomorrow. It is imperative for you to contact your State Senator today to oppose this legislation.

The bill will create a powerful new bureaucracy – accountable only to the Governor – that will duplicate current state regulation of local fiscal affairs; that will slow down and add uncertainty and costs to local contracts; that will cost the people of New Jersey at least $7 million from day one; and that has not been subjected to careful committee consideration or objective fiscal analysis.

We have no objections to a State Comptroller. But, we must, first, 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 must, second, be assured that all of the bill’s costs are accurately estimated and that the benefits to be provided justify those costs.

This bill fails both of those tests.

Section 10 presents huge procedural problems. It would seem to give the Comptroller the power to subject any contract of $10 million, or more, to the Comptroller’s prior approval.

Specifically, it provides that, whenever a municipality anticipates soliciting bids on a contract of $2 million, or more, it must so notify the State Comptroller. If the contract involves the expenditure of $10 million or more, “the State Comptroller shall be part of the procurement development process to avoid favoritism, improvidence, or corruption.” The bill allows the Comptroller unlimited time to “review all facets of the procurement including the process of soliciting proposals for, and the process of awarding, that contract.” After receiving the Comptroller’s report, the local unit would have to wait at least “10 business days before issuance of any public advertising or notice of availability of a request for proposals or other formal solicitation.” It, further, seems that the contracting process can only proceed if the report includes, “State Comptroller's affirmative determination that the process complies with applicable laws, rules and regulations or (if the local unit accepts) specific recommendations how the process should be corrected or revised in order to comply with applicable laws, rules and regulations.”

The bill fails to give a municipality any guidance on what objective standards the Comptroller would apply, in denying approval of a process, beyond compliance with current law, rule or regulation.

We cannot be sure that the Comptroller will have sufficient staff to act in a timely manner on the many municipal contracts that would be subject to this Section, while at the same time, dealing with county contracts, school districts contracts, contracts to be bid by municipal authorities, and all the anticipated contracts of the myriad State Departments, divisions, offices, boards, commissions, agencies and authorities. And, in addition to the contract approval power, the Comptroller would, by this bill, also be responsible for various other important duties and functions.

Further, according to Section 8.c., all budgets over $100,000,000 must be audited by this new office, at least biennially. Right now, about 15 municipalities would be affected by this provision. Currently, all budgets must be reviewed by the Division of Local Government Services. It will be costly to provide the State Comptroller with sufficient staff to exercise all of these powers in a timely manner. And the benefits of this added layer of over-sight on municipal fiscal affairs, which are already heavily regulated, need to be quantified.

We question the cost, as well as the benefit, of having two state agencies review the same budget. And we would suggest that it would be less costly and more beneficial, to both the State and local government, to strengthen and augment the DLGS review process, and to provide that agency with more adequate resources.

We have to assume that a state official, appointed by the Governor, and dependent of the Governor and the Legislature for funding, and responsible for both state and local fiscal decisions, will make state issues a priority, and be less prompt in addressing concerns that matter most to our beleaguered property taxpayers.

We, therefore, ask you to urge your Senator to remove local fiscal affairs from the purview of this new office, until we are able to gauge the true costs and the true benefits of the Comptroller’s regulation of State affairs. Only then can we be certain that an extension of the powers of the office, to cover local finances, might actually provide any new benefit to the property taxpayers. Absent that amendment, urge your Senator to vote “No” on S-2.