Township to state: Where’s the money?

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Push underway to end state ‘skim’ of Energy Tax Receipts

BEESLEYS POINT – Upper Township Committee is adding its voice to a statewide call to end New Jersey’s “skim” of Energy Tax Receipts.


Upper Township and other communities were once paid directly by utility companies for hosting power lines and other facilities like the B.L. England power plant in Beesleys Point. Janice S. Mironov, president of the New Jersey State League of Municipalities and mayor of East Windsor Township, said in a letter that the payments amounted to “rent” to compensate taxpayers for hosting transmission facilities and gas or electric lines in their community.

The taxes were originally paid directly to the host municipalities, she said. But in the early 1980’s, the state became the collection agent for the taxes. At that time, it promised to return to towns all proceeds for municipal property tax relief.

“For years, however, state budget makers have diverted funding from Energy Taxes to fund state programs,” Mironov wrote in her letter to New Jersey mayors, which is posted at the league’s website. “Instead of being spent on local programs and services and used to offset property taxes, the money has been spent as successive legislatures and administrations have seen fit.”

For instance, for hosting the B.L. England power plant in Beesleys Point, the company that owns the plant, RC Cape May, pays $13 to $14 million in Energy Tax Receipts. Upper Township received less than half of that in 2012 – $6,191,482.

Mironov and the League of Municipalities is seeking support for a bill advancing in the legislature that would guarantee taxes collected for municipal property tax relief will be used only for that purpose.

Assembly Bill A-2753, and its Senate companion S-1923, would require certain Energy Tax Receipts to be paid directly to municipalities, beginning in the state’s next fiscal year, according to Mironov.

“Local elected officials are in the best position to decide the best use for these resources,” she said.

A-2753 requires the state treasurer to calculate amounts due to municipalities, adjusting for inflation. Those payments would be made directly to the municipalities by the utilities. In 2013, the amount to be apportioned to the municipalities would be $1,108,115,000, said Mironov.

The bill would also require the state to restore to towns approximately $331 million in reductions to municipal and Energy Tax Receipts aid that was eliminated over the past several years. 

In 2010, Upper Township saw $212,000 cut from its Energy Receipt Taxes. There were no further cuts in 2011 or 2012. If that funding was restored, it would shave around a penny off the tax rate here.

The state legislature passed a bill last spring that would restore Energy Receipt Taxes and other municipal aid to 2007 levels. That bill was vetoed by Gov. Chris Christie.


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