KEARNY/NORTH ARLINGTON –
Two of The Observer communities that receive revenues from the Meadowlands Intermunicipal Tax Sharing program claim they are being shortchanged.
The Town of Kearny says the N.J. Sports & Exposition Authority advised it to expect a total of $3,555,212 for 2016 but the town says it has only been given a partial payment, leaving an unpaid balance of $1,711,388, and compelling it to “use surplus funds to make up the difference which will have a detrimental impact on the 2017 municipal budget.”
So, last Tuesday, Feb. 21, the mayor and Town Council passed a resolution to “condemn the action of the State Treasurer and Executive Branch of the state government” for “failing to obey the clear mandate of the statute” by not providing Kearny the money to which it is entitled.
Kearny says it will be “taking all actions necessary” to force compliance by the state.
The North Arlington mayor and council also recently unanimously passed a resolution directing the borough attorney to take all steps necessary to recoup $630,887 the borough says it is still owed by Intermunicipal Tax Sharing Fund, administered by the N.J. Sports and Exposition Authority.
The program, in effect since 1973, was calculated so Meadowlands municipalities with fewer development restrictions were required to deposit a share of their tax ratables into an account administered by the NJSEA.
Money in this account was distributed yearly to the municipalities with greater development restrictions to make up for their loss of tax-ratable growth opportunity.
In 2015, when the NJSEA and the N.J. Meadowlands Commission consolidated, the tax sharing formula changed. The former payers into the account were relieved of the obligation and a new tax on hotel rooms in the Meadowlands was created. The revenue from the hotel tax would continue to be paid to Meadowlands municipalities that lost ratables.
“We have received these tax-sharing payments since the beginning of the program because our ratable opportunities were taken away by the State of New Jersey after they filled our land with garbage,” Mayor Joseph Bianchi said. “I would have gladly accepted development and let someone else take the waste.”
Council President Dan Pronti, who brought this issue before the mayor and council, spoke of the dire consequences of not receiving the money.
“When the tax-sharing numbers are certified annually, we are required by law to place the amount into our budget. The law is black and white,” Pronti said. “What does the state do? They tell us we are not going to get the last $630,887, because the governor vetoed it from the state budget. The state treasurer says it’s not his problem.”
Pronti pointed to the language in the law that made the change to tax sharing, which says that any shortfall from the hotel tax would be made up by the state.
“We follow the law and put the full amount in the budget, only to find out that the state Treasurer says it is not his problem if there is a shortfall,” Pronti said. “I guess he (the governor) doesn’t believe he needs to follow the law.”
Pronti now has a 2016 municipal budget that has a $630,887 shortfall in revenue.
“I am not allowing the taxpayers of North Arlington to have this burden placed on them. We will fight the state on this,” Pronti said. “We are tired of Trenton shifting the tax burden onto the local property tax payers. This ultimately takes away from the municipal or school aid the people rely on.”
The NJSEA recently certified the 2017 tax-sharing amounts and North Arlington is scheduled to get $973,741.
Councilwoman Allison Sheedy, who is on the finance committee, says she wonders what to do with that certified amount.
“We are supposed to honor the amount they give us, but last year’s number was a lie,” Sheedy said. “I don’t know how we are going to put together the 2017 municipal budget. It’s just not fair what they are doing. By law, we must have a balanced budget, but the state, in 2016, did not give us the funds due to us. This forces us into non-compliance with the state finance law.”
In addition to its litigation, the borough is working with the other Meadowlands towns that have not received their payments. A resolution was approved at the last Meadowlands Municipal Committee meeting supporting the communities that did not receive their full amount.
NJSEA spokesman Brian Aberback said: “As the Authority receives tax sharing revenue [from the state treasurer’s office], it will continue to distribute the funds in accordance with the law.”
