Another tilt at enticing NJ local governments to share services — and maybe save money

The measure would allow for a loss of state aid if municipalities ignore chances to share and save. Sponsors of the measure see it as a way to curb property taxes
Credit: Doug Kerr from Flickr (CC BY-SA 2.0)
File photo: The Town Hall in Cranbury

A key state Senate committee approved legislation Thursday that seeks to make it easier for local governments to save money by pooling services.

The measure’s advancement out of the Senate Budget and Appropriations Committee comes days after the release of new statewide data that revealed the average New Jersey property-tax bill rose above $9,000 for the first time ever last year. Local governments in New Jersey rely heavily on property taxes to fund their annual budgets.

Among other provisions, the legislation seeks to address technical hurdles, including some civil service rules, that can prevent local governments from saving money through shared services.

The measure would up the stakes for some municipalities in New Jersey that aren’t already engaging in shared services by setting conditions for removing state aid if local officials ignore well-documented savings opportunities.

The bill is one of dozens drafted by lawmakers in response to a report called “Path to Progress” that was issued in 2018 by a group of nonpartisan state policy experts who were asked by Senate President Steve Sweeney (D-Gloucester) to scrutinize government spending practices and offer ways to save money through reform.

Senate President Sweeney is keen

Sweeney, citing the ongoing coronavirus pandemic, said “identifying and implementing government efficiencies that will produce cost savings for taxpayers is more important than ever.”

“Property taxes in New Jersey are the highest in the nation, and we all know why,” said Sweeney, who is a primary sponsor of the bill.

Senate President Steve Sweeney is a primary sponsor of the measure.

In all, nearly $31 billion in revenue was raised through local property taxes to support spending by county and municipal governments, and school districts across the state, in 2020, according to figures released by the Department of Community Affairs earlier this month.

New Jersey homeowners paid an average property-tax bill of $9,112 in 2020, according to the new data. That’s up nearly $160, or 1.8%, compared to 2019 figures.

A 2% cap on annual levy increases enacted in 2011 by former Republican Gov. Chris Christie — with cooperation from Sweeney and other Democrats, who control the Legislature — has been credited with helping to slow the growth of property-tax bills over the last decade.

However, with the average bill having increased by more than $1,350 since the 2% cap was established, finding ways to reduce costs for the state’s many local governments, including through shared-services initiatives, has remained a key goal for lawmakers.

Make it easier to enter agreements

The measure that cleared the Senate Budget and Appropriations Committee in a 12-0 vote on Thursday would update the state’s “Uniform Shared Services and Consolidation Act” to make it easier for local governments to enter into shared-services agreements and joint contracts.

Among other provisions, the bill calls for changing rules that apply to the reorganization of civil service employees whose jobs would be affected by a shared-services agreement. It also seeks to expedite any disputes involving civil service rules or tenure provisions that have been blamed for snagging prior shared-services efforts.

If enacted, the bill ultimately could result in the loss of state aid for municipalities that have yet to engage in shared services if local officials refuse to adopt or at least try to adopt recommendations from the state’s Local Unit Alignment, Reorganization and Consolidation Commission that would result in savings for local taxpayers without reducing the quality of services.

Several groups testified in favor of the legislation during Thursday’s committee review, including business-lobbying organizations, whose representatives stressed the challenges that high property taxes pose for the owners of small businesses, including many who are struggling to stay profitable amid the ongoing pandemic.

“We support this, and we want to make sure that government is run efficiently and we’re saving money and cutting costs where we need to,” said Laura Gunn, director of government relations at the New Jersey Chamber of Commerce.

“We know it’s not a magical silver bullet … but this committee, this Legislature (and) this state needs to do everything we possibly can to pursue structural reforms,” said Chris Emigholz, vice president of government affairs at the New Jersey Business & Industry Association.

“Small businesses are the ones that are getting killed during this pandemic, and property taxes are often their biggest tax, so anything we can do to move this along would be great,” he said.

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