TRENTON – State League of Municipalities Executive Director William Dressel said while he’s disappointed the bill on returning energy tax receipts directly to municipalities won’t move forward Thursday, due to revenue shortfalls, he’s pleased that, at the very least, the subject has gotten some lawmakers’ attention.
And, he is optimistic the subject will play a role in the state budget process.
“We are getting down to the nitty-gritty in the budget discussions, and I can understand it (being pulled),” Dressel said. “We are hopeful our issues will be part of an overall discussion (on the budget). I think that’s good news.”
The league has waged a focused campaign in the past few months, raising the issue before several committees. The league has said that since the state started collecting the energy taxes more than a decade ago, it has used the money to balance the state budget instead of returning the funds to the respective towns.
With Tuesday’s announcement that year-to-date revenues are $230 million short, bill S1900, which calls for millions of dollars in energy tax receipts to municipalities, has been put on the shelf.
In a telephone interview prior to the decision, Sen. Paul Sarlo, (D-36), of Wood-Ridge, who sponsored the bill and serves as chairman of the Senate Budget Committee, told State Street Wire that the bill, S1900, was pulled from the committee’s agenda.
“We’re clearly interested in learning more about the revenue projection,” he said.
Taxes on gas and electric utilities were formerly collected by the individual municipalities where they are located.
Sarlo’s bill would have restored $385 million cut from the program in fiscal years 2009, 2010 and 2011, and would have provided an additional $54 million to support aid increases required under existing law, according to the legislators.
The funds would be provided over a five-year span, with the first $87.8 million payment coming in the 2013 fiscal year. After the five-year run-up, the state would be mandated to distribute the full amount of energy tax revenues to municipalities.
“The days of Trenton taking property tax relief from municipalities to pad the state budget need to end, plain and simple,” Sarlo said in a statement on the bill’s introduction.
Sarlo said on Tuesday the below-expectation revenues may force Gov. Chris Christie and Senate President Stephen Sweeney, (D-3), of West Deptford, to scale back their tax cut proposals. On Wednesday, that bill, S1, was also pulled from the committee’s agenda.