Cost-Saving Measure Designed to Eliminate Duplicative Services, Save Taxpayer $$
TRENTON – The Senate Budget and Appropriations Committee today approved a bill sponsored by Senator Bob Gordon that would pave the way for the state’s first municipal merger plan in 15 years, which will help eliminate duplicative services and provide long-term savings for several municipalities in Bergen County. The legislation would also create a more equitable payment system to offset the loss of revenue for towns in the Hackensack Meadowlands District where development is restricted because of environmentally-sensitive wetlands.
“This plan is designed to cut overall spending, improve the efficiency of services and lower property taxes,” said Senator Gordon (D-Bergen). “Due to the recent cuts in municipal aid and those expected in the future, local governments are under increasing pressure everyday to find ways to do more with less. This plan incorporates a sensible approach to eliminate duplicative services that waste taxpayer dollars.”
Senate bill S-2078, also known as the “Meadowlands Regionalization, Efficiency and Property Tax Relief Act of 2010,” calls for the Borough of Teterboro to be dissolved into four adjacent municipalities: South Hackensack, Little Ferry, Moonachie and Hasbrouck Heights.
Teterboro, a town of 1.1 square miles, has an estimated population of 40 residents, a public payroll of 23 employees, a municipal budget of $5.3 million and yet a tax base of $383 million. Based on these figures, Teterboro’s operating budget of $5.3 million amounts to $133,318 per resident, giving it one of the lowest per capita tax burdens in the state while surrounding towns with lower ratables have higher tax burdens.
“The reallocation of Teterboro’s disproportionately large tax base is a win-win for all the municipalities involved,” added Senator Gordon. “It will help lower property taxes in the four adjacent towns absorbing Teterboro. Additionally, it will benefit current Teterboro residents due to the broader array of services that will be available from the larger municipalities.”
The bill also calls for the elimination of inefficiencies by merging two of the three non-contiguous parcels that comprise South Hackensack into neighboring towns. The “eastern tract” of South Hackensack would be divided between Moonachie and Little Ferry while the “western tract” would be merged with Wood-Ridge.
The plan will also provide up to 20 years of property tax relief for business property owners located in any annexed territory, if the tax rate of the annexing municipality is at least five percent higher than the tax rate in the property’s original municipality. Under these circumstances, property taxes would be frozen at the original municipality’s rate and any future increases would be limited solely to the annual change in the Consumer Price Index for the North Jersey area.
Senator Gordon also highlighted the benefits that the plan will provide for the fragmented town of South Hackensack.
“The existing configuration of South Hackensack is incongruous, isolated and drives up costs to provide basic services to these outlying areas. The fragmentation of local government carries a high price. We are approaching the new fiscal year with the third highest budget deficit in the nation. We can no longer afford to ignore the obvious benefits associated with merging smaller towns to achieve cost savings. By dissolving two of South Hackensack’s non-contiguous parcels into surrounding towns, residents will benefit from more efficient public services, particularly emergency services, which will be able to respond much quicker,” added Sen. Gordon.
Senator Gordon noted that the last municipal consolidation to take place in New Jersey was in 1995 between the towns of Pahaquarry and Hardwick.
The third component of the bill would address issues with the inter-municipal account established to support the Hackensack Meadowlands District. Currently, a significant portion of the Meadowlands region is closed off for development because the region includes environmentally sensitive and protected areas such as wetlands. In light of this, certain municipalities within the Hackensack Meadowlands District pay an annual assessment into the inter-municipal account, in accordance with a formula set forth by law, for distribution to other municipalities in the district where development is restricted or prohibited. This bill would alleviate the burdens posed on municipalities that are forced to pay into this account by requiring the state to make the payments instead.
The bill now heads to the full Senate where it is likely to be posted for a vote on Monday.
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