Challenges for Our New Governor
By Albert B. Kelly
When I last spoke with Governor-Elect Phil Murphy in the
lead-up to Election Day, he seemed to have it just about right in terms of the
challenges facing our state and what he hopes to accomplish in the term ahead.
His perspectives were nuanced enough to distinguish between the challenges
facing the larger urban cities in North Jersey and those facing us here in the southern
garden half of the Garden State.
One strong step toward stability for municipalities would have
the State rethink the Energy Tax (Energy Tax Receipts Property Tax Relief
Program or ETR) as well as Consolidated Municipal Property Tax Relief Aid known
as CMPTRA. The Energy Tax as it stands today is an off-shoot of the Public
Utility Gross Receipts and Franchise Tax (PU-GRAFF) that was once collected at
the municipal level, with funds going to the municipalities to take care of
business at the local level.
In the early 1980’s, the utilities asked the State to
collect these revenues as a way to make the process easier. The law required
the State to turn those proceeds back to the communities to ease the burden on
local property taxes. In the 1990’s, the State rolled the Financial Business
Tax, Business Personal Property Tax, Corporate Business Tax on Banking
Corporations, and State Payments in Lieu of Taxes or PILOTS, into one package we
know today as “CMPTRA”.
Unfortunately, over the years the State has used increasing
amounts of these revenues to plug holes in the state budget, leaving
municipalities to raise local property taxes to make up for what’s missing from
ETR and CMPTRA. Now is a good time to revisit how this aid is distributed,
especially for cities like Bridgeton that host State buildings, state prisons
and other tax exempt property that doesn’t support the ratable base.
This will be especially critical if the 2% CAP on annual
raises and salary arbitration is not part of the tool kit moving forward. The
CAP comes with mixed emotions because on one hand, there is our recognition of
the often thankless and dangerous work our first responders and law enforcement
do on our behalf, but there’s also a limit to what tax payers can handle
financially. If the CAP will not be part of the tool kit going forward, then
offsetting the impact with additional CMPTRA and ETR will be a critical piece.
I am greatly encouraged by Mr. Murphy’s desire to make sure
that public schools are fully funded and this is part of addressing systemic
inequities that impact not only communities in the present, but the students
that will be our future workforce, government officials, business owners, civic
leaders, and entrepreneurs. So yes, it’s partly about the burdens now, but it’s
also about the future.
Another critical issue is that of legalizing marijuana and
while some see it as a “gateway” to harder drugs, it’s also a gateway for
inequality when you consider the number of people either locked up or living
with a record for low-level non-violent offenses. In addition, there are real
medical benefits that should not be hard to access for those in dire medical need.
Finally, given our fiscal challenges, the additional tax revenue would help in
a number of key areas.
One area I hope the new Governor will look at in a serious
way is municipal or public banking. During the campaign, much was said about
the need to invest in our infrastructure from water to highways. Various pieces
of infrastructure get handled on the local level if they get handled at all. Having
a public bank or regional public banks (i.e. north, central, and south) would
allow the bulk of the capital to go to actual improvements as opposed to paying
debt service to Wall Street and lawyers.
For our urban communities, I am hopeful that the Murphy
administration will take a fresh look at the Urban Enterprise Zone (UEZ)
Program. Bridgeton, Newark, Camden, Trenton, and Plainfield had their zone
designations expire last year with others to come. While the UEZ program may
need to be updated for the today’s new normal, it is a necessary incentive in
the urban revitalization tool kit.
Policy prescriptions notwithstanding, it’s time for a
renewed bipartisan and cooperative spirit because at the end of the day, it’s still
about doing the people’s business on the ground in our municipalities, in
Trenton and down in Washington D.C- these hopes now rest with our new
governor.