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NJ Is Skimming Our Tax Revenue: Mayors

Tuesday, April 17, 2012

Utility pole Utility pole (Photo by Metropolitan Transportation Authority / Chris Calvagna./flickr)

Mayors from across New Jersey are calling on the state to stop skimming tax revenue from utility companies they say rightly belongs in local coffers.

The towns levy the tax on utilities for any infrastructure in their jurisdictions, such as power lines, poles or underground lines. 

The state collects the funds, but it used to return 100 percent to the municipalities. Then the state began taking some of the money as an administration fee since the 90s, and that figure has grown each year.

"What eventually will happen in the long run, is we will go out of business,” said Mayor Joe Venezia of Estell Manor, N.J. “Our city will just literally fold up and with the cut of it. We are now doomed."

Venezia was one of 18 mayors who spoke Tuesday before the New Jersey Senate Budget Committee.

The state is planning on keeping $330 million in utility tax revenue this year, according to the N.J. League of Municipalities. Its president, Mayor Arthur Ondish of Mount Arlington, says 300 mayors have signed a petition demanding the state return this year's money to local government.

"This affects every municipality and it is righting a wrong that has been going on too long," Ondish said.

The first year the state kept a portion of the tax revenue, calling it an administrative fee, it amounted to about $11,000 from the Mount Arlington budget, he said.

This year, Ondish said, Mount Arlington would lose $327,000.

Local governments are struggling, he said, because property taxes can't grow by more than two percent, yet costs are rising by more than that.

The state legislature did not return immediate request for comment.

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