State lawmakers and other public leaders are aiming to deliver on their promises to make New Jersey more affordable. The topic has been front and center in Trenton since the November elections, with Gov. Phil Murphy and Democratic legislative leaders pledging to tackle the high costs of living and doing business here.
New Jersey imposes some of the nation’s highest tax rates on property, income and businesses. Figures released in January by the state Department of Community Affairs showed the average property tax bill hit an all-time high of $9,284 – an increase of more than $174 from 2020.
Meanwhile, average property tax bills in a third of the state’s counties topped $10,000 at a time when Democrats in Washington, D.C., have been unable to gain support to lift the Trump-era $10,000 federal cap on state and local property tax deductions.
Legislation in the works and other proposals all center on lowering property taxes. And state leaders are encouraging more shared services among New Jersey’s 564 municipalities and 21 counties. Governments at those levels are being urged to pool their resources for such services as courts, trash collection, code enforcement and policing. The idea is that towns can cut their costs and property taxes by regionalizing.
Enter New Jersey’s “shared services czars,” one Democrat and one Republican, both lifetime friends and former mayors, who have been working since Gov. Phil Murphy appointed them in 2018 to sell the idea to localities.
The duo – Republican and former Harding Township Mayor Nicolas Platt, and former Summit Mayor Jordan Glatt, a Democrat – share a friendship stretching back 30 years. Their families grew up on neighboring farms.
Both are paid $1 annually, because “we felt if we took a salary we would be viewed quite differently,” Platt said in an interview. “It’s a great parting line when somebody says ‘you’re just doing this because you’re paid to do it.’”
“We do not have the pushback and the resentment … that the state was coming in and forcing them to do things,” Platt continued.
Glatt and Platt have a $10 million budget for municipalities to study different shared services options. The pair estimates that since 2018, they’ve helped towns transition to shared services arrangements that have saved a combined $104 million.
Inmate sharing arrangements have been put in place by six counties. The Department of Community Affairs estimates that Sussex and Morris counties save $1.4 million a year; Essex and Union counties save an estimated $103 million over five years, and Cumberland and Atlantic counties save about $8.7 million a year.
Atlantic County is implementing a county-wide court consolidation, while South Orange and Maplewood are exploring a potential merger of their fire departments and Belmar has absorbed neighboring Lake Como’s police department.
Pine Valley, a posh Philadelphia suburb with 11 residents, a $20 million tax ratable, and which consists almost exclusively of a golf course, will be absorbed into neighboring Pine Hill.
But most of the duo’s wins have been low-hanging fruit, such as tax assessors and collectors, code enforcement and garbage collection, said Jacquelyn Suarez, the DCA’s local government services director. The heavy lifting will be in the consolidation of schools, police and fire departments, though “we always knew” that would be the case, Platt said.
“As the services [get] closer to the residents, there’s more pushback,” said Glatt. “The further away from the resident the service is, the easier it is to merge.”
So a merger of two health departments would face less resistance than the merger of two neighboring town’s police departments. “When you’re interfering with the unions and their membership, we don’t see eye to eye,” Platt added.
School regionalization is getting the biggest push from leaders in Trenton, with Murphy having signed a bill last month earmarking $10 million for the DCA to help the state’s 600-some-odd school districts to study consolidation.
“Most towns, 50% of the tax money goes toward the local schools,” Platt said. He acknowledged that teachers’ unions and elected officials very often block or at least try to slow down school regionalization.
For low population counties, it might make sense to form a county-wide school district. “The schools can all remain where they are,” Suarez said. The target would be “top administration, who we all know are making the most money.”
On police and fire services, Glatt and Platt said they must navigate tricky waters. Some police unions contend that a poorly implemented merger could mean the lay-off of officers who spent decades on the force.
Glatt and Platt noted that police officers are retained once mergers are finished but might not be replaced as they retire or move to other jobs.
“The delivery of services have not been negatively impacted in any way … or have actually improved” Suarez said. “They haven’t seen longer response times to 911 calls … they haven’t seen less police presence.”
An NJ.com investigation from January examined 21,000 police salaries across the state, finding many officers bringing in tens or hundreds of thousands of dollars of overtime and off-duty traffic monitoring, with little public scrutiny. The media outlet found 104 cops who earned more than $250,000 a year, of whom 13 earned $300,000.
Murphy, during a Jan. 24 COVID-19 briefing, indicated that “the police reality has not been a part of that discussion” of affordability and property tax relief, “and my guess is it will not be.”
“It really has become so much more through the Assembly and Senate, having pressure put on them to allow some of these rules to make it very hard to rein in police salaries [and] overtime,” Platt said.
RELIEF FROM TRENTON
The first Senate committee meeting of the new session – held on Jan. 27 – resulted in a package of affordability bills dealing with property tax relief or shared services.
“There’s no mistake our first committee that I authorized was on the singular topic of affordability and property tax relief,” the newly installed Senate President Nicholas Scutari, D-22nd District, said in a recent News12 New Jersey interview.
One bill approved by the Senate Community and Urban Affairs Committee, Senate Bill 330, shifts funds under the Energy Tax Receipts so that the money goes back to towns and cities rather than to plug holes in the state budget.
Local governments initially collected those fees paid by utilities, but it was later handled by the state. Starting in 2008, under then-Gov. Jon Corzine, the state siphoned away billions of dollars that should have gone to local governments. “In terms of affordability, that’s about as significant as you can get,” said Michael Cerra, executive director of the New Jersey League of Municipalities.
A second measure approved by the Senate panel, S343, increases the deduction that tenants can claim on their income taxes for their rent costs from 18% to 30%.
Lawmakers also may start promoting regional economic development projects where towns and cities pool funds together to boost the local economy. The goals of such partnerships could include “assisting existing businesses, attracting new businesses, providing incentives to retain existing businesses in the region, redeveloping existing areas or facilities, and sharing costs of a project or projects,” according to the text of S616.
And they would be eligible to receive financing for the “marketing, advertising, and promotional programs to further their activities, promote business growth and to assist existing businesses within the region.”
“It will encourage better and more collaborative economic development planning on a regional level, which is a method used in other states,” said Chris Emigholz, vice president of government affairs at the New Jersey Business & Industry Association.
“When economic planning and partnerships go beyond municipal borders, it’s a pathway to find real efficiencies, cost-sharing and cost-savings – which hopefully filters down to taxpayers.”
Editor’s note: Belmar has already completed the merger of neighboring Lake Como’s police department. Additionally, former Harding Township Mayor Nicolas Platt’s name was misspelled in the original story.