Interactive Map: Most Towns Receive Less State Aid Than They Received in 2006

Only major cities would see significant boost in funding under Gov. Christie’s proposed budget

For the sixth year in a row, Gov. Chris Christie’s budget gives all but a handful of New Jersey municipalities no increase in state aid.

According to the local aid recommendations posted Wednesday on the state Department of Community Affairs website, only three cities would receive any aid increase over last year in the budget Christie proposed last month.

For all three — Atlantic City, Trenton and Union City — the additional aid represents transitional aid the cities received to cover extraordinary circumstances. That additional aid totals $29 million of $1.42 billion in municipal aid.

Since 2010, only a dozen municipalities have received a net increase in state aid. In Atlantic City’s case, the state has more than quadrupled aid to the city, which is teetering on the brink of bankruptcy due to numerous casino closures. This year, Atlantic City is slated to get nearly $26.3 million from the state.

However, in his first year in office, Christie cut municipal aid by 18 percent, so all but 12 communities stand to get less in aid this year than they did in 2009, the year before Christie took office. And 97 percent of the state’s municipalities are likely to get less in local aid than they did in 2006, an analysis of the data shows. In total, towns are slated to get 16 percent less this year than they did a decade ago.

“Level property tax relief funding makes it harder to deliver essential services for more municipalities each year,” said Jon Moran, senior legislative analyst with the NJ State League of Municipalities.

Moran said that if the state increased aid, towns could use that to offset costs in pensions, health benefits, debt and emergencies “over which local officials have no control, and help more towns to keep the (property tax) levy increases under 2 percent.”

Municipal officials have been complaining for years that the state is keeping some of the energy tax revenue it receives to help balance its budget, rather than returning it all to towns. That diversion would continue under Christie’s budget proposal.

Local officials are pushing legislation, approved last month by the Assembly State and Local Government Committee, that would return, beginning July 1, $331 million of the energy tax money kept by the state in 2009-2011.

“Once again, some local Energy Tax Receipts funding will be redirected to cover unspecified state priorities,” Joseph Tempesta Jr., the mayor of West Caldwell and league president, told the Assembly Budget Committee at a hearing Wednesday in Montclair. “For the sixth straight year, local property taxpayers will be denied the benefit of annual inflationary adjustments that are required by state statute in both CMPTRA (Consolidated Municipal Property Tax Relief Aid) and Energy Tax funding … The cumulative impact of years of underfunding, going back well before those cuts, has left many municipalities with unmet needs.”

He said municipalities have done their best to provide needed services and stay within the state mandated 2 percent tax levy cap in 2010, but at the expense of some other spending.

“Local officials are also committed to providing for the health and safety of their follow citizens. They are also committed to promoting local economic development and redevelopment opportunities. And they are also committed to protecting the rights of future generations to enjoy the same, if not a better, quality of life, than that of their parents and grandparents,” Tempesta continued. “We urge you to consider the need for high quality local programs and services and the constraints under which local officials must operate.”

Christie’s $34.8 billion spending plan would give Newark and Camden the most aid, $101 million each, with Newark receiving about $200,000 more. Every New Jersey municipality would receive at least a pittance, with the tiny and sparsely populated Camden County boroughs of Pine Valley and Tavistock slated to receive little more than $2,000 in aid apiece.

There’s another provision of the budget that could hurt municipalities.

Christie’s budget proposes delaying the distribution of the final CMPTRA and Energy Tax payments, the two largest categories of aid to towns. Instead of distributing the final 5 percent of this aid on December 1, as is usually the case, this proposal delays the distribution of the final 15 percent until December 20, Tempesta said.

“We have heard that the change will assist in addressing some state cash-flow problems,” he said. But not giving municipalities their final aid payment until the year is almost over — and increasing the amount of aid the state withholds until the end of the year — could create cash flow problems in some municipalities. “We want to note that, when faced with a budget problem, the state has, once again, looked to municipal budgets for a solution.”