For nearly a century, municipalities received payments from energy companies that operated in their communities. But for the last 25 years, lawmakers have diverted some of the money into state coffers. In the last decade, they have used a provision to ignore commitments to local governments in the interest of balancing the state budget.
During the last 10 years, the state has withheld from cities more than $3.4 billion in scheduled increases to the energy tax and another tax-relief program. The total is nearly $900 million in the current fiscal year.
Though reaction by the Senate committee was mixed, Gov. Christie was unsympathetic Tuesday to municipalities' budget woes.
At a news conference in Bedminster, he spoke of the property tax caps he and the Democratic-controlled Legislature have put in place. His message to local governments was clear: Don't expect to raise more money by getting around the cap, and don't expect more money from the state.
"I'm tired of hearing Bill Dressel moan and complain at the League of Municipalities," Christie said, referring to the league's executive director. "He should spend more time trying to teach his folks how to share services and less time lobbying down in Trenton, complaining about things that benefit the state."
In Trenton, Mayor Colleen Mahr of Fanwood Borough said $2.1 million had been withheld from her town during her nine years in office.
"The appetite to balance the state's budget . . . on the backs of taxpayers is out of control," Mahr said.
Mayor Steve Acropolis of Brick Township said his city had lost $10 million since 2010 because of the state's practice of diverting funds.
"Just because a government entity can do something doesn't mean it's fair," Acropolis said.
Sen. Linda Greenstein (D., Middlesex) is working on ways to address the complaints, including a bill that would have utilities pay municipalities directly. The bill would likely require guarantees that some of the money go toward tax relief, she said.
"From the point of view of just plain justice, you folks have a tremendous point," Greenstein told local officials.
Others were not as receptive. Sen. Anthony Bucco (R., Morris) said the state was struggling to make ends meet, and fellow Republican Sen. Jennifer Beck (Monmouth) questioned whether local officials would use the money to lower taxes.
Jon Moran, an analyst for the league, said the only way to address the issue permanently would be with a constitutional amendment to eliminate the provision allowing budget bills to supersede other legislation.
What municipalities really are looking for is a change in thinking in Trenton, he said.
"We respect the need for a balanced [state] budget," and dipping into money owed municipalities "makes sense when there's a budget crisis," Moran said. "But there can't be a budget crisis every year."
