Sweeney, Gopal ‘Shared Services’ Bill Approved By Senate Committee

Reforms Would Make Government More Efficient, Create Taxpayer Savings 

TRENTON – Legislation sponsored by Senate President Steve Sweeney and Senator Vin Gopal that would promote taxpayer savings through the creation of greater efficiencies with shared services by local governments cleared a Senate committee today.

“Identifying and implementing government efficiencies that will produce cost savings for the tax payers is more important than ever,” said Senator Sweeney (D-Gloucester/Salem/Cumberland). “The new federal tax law will have a hard impact on the residents of New Jersey and their ability to deduct local taxes for community services. Shared services are a proven way to continue to provide the services important to our quality of life with reduced costs.”

The bill, S-1, approved by the Senate Budget and Appropriations Committee, would modify the “Uniform Shared Services and Consolidation Act” to encourage and facilitate the provision of local and regional services through shared service agreements and joint contracts. It would require New Jersey’s Local Unit Alignment, Reorganization and Consolidation Commission to study municipal governments to determine where taxpayer dollars could be saved through shared services.

“Sharing public services as a way to govern more responsibly is not a new concept in New Jersey, but it is one that has grown more popular, especially in these uncertain times when every tax dollar is stretched,” said Senator Gopal (D-Monmouth). “We continue to look for ways to encourage shared agreements, and support our towns and counties who are thinking outside the box in order to enhance services for residents through the efficient use of tax dollars.”

Under the bill, if a municipality does not approve a LUARCC recommendation for the sharing of services, or does not make a good faith attempt to implement the recommendation within the required timeframes, it would be subject to a loss of state aid equal to LUARCC’s estimated cost savings for implementing the recommendation. The recommendation can be approved by the local governing board or the voters. If one town approves it but another denies it, only the town that denied it would lose aid.

Senator Sweeney noted that it takes a “carrot-and-stick” approach by giving residents the option of either approving certified cost-saving options that provide equal or better services, or taking reduced state aid if they vote no.

“Property taxes in New Jersey are the highest in the nation for reasons that are all too familiar,” said Senator Sweeney. “We are a high-income, densely populated, high cost-of-living state with an economy competing on jobs and salaries with New York City and Philadelphia. Adding to the complexity and difficulty is the fact that we have 565 municipalities, more than 600 school districts, 21 county governments and hundreds of authorities responsible for delivering government services. That’s why increasing shared services at the local level is so important and such a critical tool in controlling property taxes.”

The bill would also make it easier for municipalities that choose to share services to reorganize Civil Service employees, creating greater efficiency. This would address a concern raised by local government leaders that Civil Service rules serve as a barrier to sharing services. The bill would expedite the resolution of disputes over Civil Service rules and tenure provisions in the context of shared services agreements and joint contracts.

Under the bill:

  1. local units would no longer be required to provide employees terminated for reasons of economy and efficiency with a terminal leave payment;
  2. the Civil Service Commission would no longer be required to review employment reconciliation plans;
  3. certain Civil Service provisions would be relaxed by the Commission upon request by the parties to the agreement. If one or more of the parties to a proposed shared service agreement or joint contract are Civil Service jurisdictions, the parties could request a relaxation of Civil Service rules to require non-Civil Service employees to become Civil Service employees for the purpose of creating a uniform employee pool;
  4. the provider local unit would be required to hire all the employees in this uniform employee pool until the pool is exhausted. An employee designated as a Civil Service employee for this purpose would also be provided with Civil Service rights; and,
  5. if the provider local unit is not a Civil Service jurisdiction, but the recipient local unit is, and employees of the recipient would be transferred to the provider, any Civil Service rules applicable to the employees of the recipient local unit would continue to apply to the transferred employees until the expiration of the collective bargaining agreement.

The bill would require LUARCC to conduct at least five on-site consultation sessions in each local unit being studied, to include in every shared services proposal an estimate of the savings, to have the State Treasurer certify LUARCC’s analysis and to hold at least two public hearings in each affected municipality. The municipality would then have the right to appeal LUARCC’s estimate to the Commissioner of Community Affairs.