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Committee Passes Singleton Bill to Assist in Property Tax Relief

Trenton – Legislation sponsored by Senate Community and Urban Affairs Committee Chair Senator Troy Singleton, which would increase funds distributed to municipalities from the “Energy Tax Receipts Property Tax Relief Fund” over a period of five years to restore municipal aid reductions, passed the Senate Community and Urban Affairs Committee.

“Affordability is the number one problem facing our state, and it can no longer be ignored,” said Senator Singleton (D-Burlington). “By increasing the funds our municipalities receive through the Energy Tax Receipts Property Tax Relief Fund, we are ultimately providing direct tax relief to our towns. Clearly, this bill is a win for property taxpayers.”

The bill, S-51, would require the distribution of additional state aid to municipalities under the “Energy Tax Receipts Property Tax Relief Act.”  Budget constraints required reductions in the amount of Consolidated Municipal Property Tax Relief Aid (CMPTRA) distributed to all municipalities in Fiscal Years 2009, 2010, and 2011.  Some municipalities also experienced reductions in their Energy Tax Receipts Property Tax Relief Aid (ETR Aid) distribution during that period.  This supplemental funding would restore, over a five-year period, approximately $331 million in reductions to CMPTRA and ETR Aid.

In Fiscal Year 2021, municipalities would receive an aid increase equal to 20% of the difference between the distribution of CMPTRA and ETR Aid they received in Fiscal Year 2008 and Fiscal Year 2012.  Municipalities would receive equal increases in each of the following four fiscal years.  The fully restored amount would be distributed beginning in Fiscal Year 2025 and in each fiscal year thereafter.  The total amount of aid to be restored to each municipality would be in addition to the total amount of CMPTRA and ETR Aid distributed to each municipality in Fiscal Year 2012.  This legislation also extends the existing ETR Aid “poison pill” protection to ensure that each municipality received an aid amount not less than the combined payment of CMPTRA and ETR Aid to municipalities in Fiscal Year 2012 and the additional aid distributed under the bill.

The bill also amends current law to require a municipality to subtract any additional amount of ETR aid it receives, pursuant to the bill, from its adjusted tax levy when computing that amount for its next fiscal year.  By deducting the additional amount of ETR Aid from the previous year’s levy, municipalities would be permitted to raise a lower amount of taxes through the levy for municipal purposes.

The bill was released from committee by a vote of 5-0.