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Trenton NJ, Senator Declan O’Scanlon said Governor Phil Murphy should explain the nearly $70 million cut to municipal aid that appears in his budget proposal for next year, which will drive large property tax increases when paired with soaring health benefit costs for local governments.
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“It’s surprising that Governor Murphy has proposed cutting municipal aid in his new budget proposal when the State is flush with cash and towns are struggling with inflation and soaring health benefits costs imposed by his administration,” said O’Scanlon (R-13), the Senate Republican Budget Officer. “It’s shocking that the governor wants to eliminate the return of $70 million of Energy Tax Receipts to municipalities that he hailed as important property tax relief just last year. Governor Murphy should explain why he thinks it’s a good idea to cut property tax relief to towns and drive tax bills higher for homeowners.”
According to The Governor’s FY 2024 Budget in Brief (page 10), municipal aid will be reduced next year by $69.1 million, a cut of 4.2%. That reduction, noted in the section labeled “Funding for Property Tax Relief,” reflects the reversal of Governor Murphy’s commitment to returning Energy Tax Receipts to municipalities.
“Republicans in the Legislature have been fighting for years to end what amounts to theft by the state from local governments and property taxpayers of Energy Tax Receipt funds,” said O’Scanlon. “We thought we made lasting gains last year, but here we are back at square one. It’s unconscionable. That the administration seeks to resume the theft of these funds in a year when the state is drowning in billions in tax overcollections and building a massive surplus tells you just how little they care about New Jersey taxpayers. It is truly astounding!”
O’Scanlon said the reduced municipal aid will be devastating for towns that already are struggling to account for a massive 22.8% increase in health benefits costs for local government employees that was imposed by the Murphy administration last fall.
While the governor’s FY 2024 budget proposal includes $200 million to offset the higher health benefit costs, the proposed aid is a fraction of the total increase that’s hitting local governments and workers in the form of higher premiums this year.
Further, O’Scanlon noted that the money will not be provided until January of 2024 – if ever – which is too late to help towns protect homeowners from huge property tax increases.
“With the higher benefit costs already hitting municipal budgets and no guaranteed state relief, we’re almost certain to see huge increases in property taxes statewide this year,” O’Scanlon said.
NJ.com reported today that the average New Jersey property tax bill hit a record $9,490 in 2022. The $206 increase was the highest since Governor Murphy took office.
Despite the bad news for towns overall in the governor’s budget proposal, O’Scanlon said it probably won’t be bad for everyone.
Pointing to $12 million in the budget to help Jersey City build a French arts museum, O’Scanlon said it’s already clear the budget will be full of pork spending for a few favored towns with nothing for hundreds of others.
“Just like in years past, we can be certain that a handful of towns with close ties to Democrat party bosses will get special pork grants added into the budget at the last minute to keep them from paying more,” O’Scanlon added. “It looks like Governor Murphy’s ‘Next New Jersey’ really isn’t so different from the old one.”