Gusciora: State Should Stop Skimming Energy Utility Taxes from Municipalities

Editor's Note: The following is a news release issued by Assemblyman Reed Gusciora.

Deputy Majority Leader Reed Gusciora (D-Trenton) will introduce a measure next week to stop the State from skimming energy utility taxes collected by the State’s Energy Tax Receipts Property Tax Relief program on behalf of municipalities. 

 Historically, these taxes were payments from utilities in lieu of local property taxes for the public right of ways for sewerage lines, water, gas and electricity.  Gusciora says the Christie Administration’s proposed continued diversion of these funds is the “ultimate robbing Peter to pay Paul, especially in light of less aid going to the municipalities.”

Gusciora’s legislation calls for the restoration of these energy tax receipts to the municipalities and returns the municipal aid to FY2010 levels.  The bill further requires that municipalities, who received this aid in FY2010, can not receive a lesser amount in any subsequent fiscal year.

“Our municipalities are laying off police, teachers, and other public employees in order to comply with the Governor’s so called ‘tool kit,’ which includes a 2 percent spending cap on local budgets,” said Gusciora.  “But with the diversion of more utility tax receipts combined with less municipal aid, it has resulted in a chain saw massacre on our towns and cities across the State.”

Gusciora noted that this year, the State took almost half of the energy taxes for the State’s general fund and administered the remaining half back to the municipalities under the label of “State aid.”  The Assemblyman labeled the latest proposed diversion as “unconscionable.”

“With the restoration of municipal aid through the payment of these energy taxes, local governments can truly live within their means.  These taxes are just compensation,” concluded Gusciora.  “After all, this is about an estimated two billion dollars that can be used for direct property tax relief to the municipalities.”