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First Do No Harm
Preserve Current Aid Levels Against Inflation
Bret Schundler
New Jersey Municipalities
December 1998
As the Governor's Property Tax Commission completed
its deliberations, the Municipal Council of Jersey City and I
passed a unanimous resolution asking the state
Legislature to commit itself to protecting
State aid to municipalities against cuts and erosion from
inflation. Such a plan would ease the property tax burden
on New Jersey residents. Therefore I am sending copies
of this resolution to all New Jersey Mayors, asking them to
help lobby the Legislature on behalf of this plan.
Although we don't know what the outcome of the
Governor's Property Tax Commission's
recommendations will be, we do know this: at minimum,
the Legislature should make a commitment to New Jersey
property taxpayers aid to municipalities. In
fact, the Legislature
should preserve current
aid levels against the
ravages of inflation by
increasing aid amounts
each year by the previous
year's Consumer Price
Index. After all, the
legislature's first
commitment to property
taxpayers should be that
it will Go no harm!
The State of New Jersey is enjoying a significant budget surplus, and various
members of the Legislature have made proposals
relative to new spending programs. But at this
juncture, the Legislature has not made any
commitment to preserving current state aid levels to
municipalities. The Jersey City resolution calls upon
the Legislature to make such a commitment and to increase current aid levels at least by the
rate of inflation each year.
Jersey City, like all other New Jersey municipalities,
relies heavily on property taxes for its revenues. In fact,
Jersey City is barred by the state from using any other
form of taxation. Under these constraints, my
administration has worked tirelessly to keep taxes, and
spending in check. The city's tax levy has increased by
only 1.9 percent since 1992, compared to a 21.4 percent
increase in the rest of Hudson County. City spending
has increased by only 3.1 percent since 1992,
compared to a 22.4 percent increase in the rest of
Hudson County. Both of these figures are well under
the 14.4 percent inflation rate for this period. Our fiscally
responsible policies have clearly saved Jersey City taxpayers money.
Our communities are
fighting to hold down
property taxes, but if the
state cuts municipal aid,
it will be like having the
rug pulled out from under
our feet. Increasing state
aid to municipalities by
the rate of inflation each
year would be relatively
inexpensive now, given
our current low inflation
rate, yet it would greatly aid municipalities in keeping property taxes down. With
New Jersey flush with a budget surplus, the Legislature
has an obligation to help municipalities reduce their
property tax load before engaging in any new spending
programs.
Bret Schundler is the mayor of Jersey City and a member of the New Jersey State League Of Municipalities'
Executive Board.

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