In the last week of March the West Windsor Town Council and Plainsboro Township Committee each passed resolutions calling for the restoration of energy tax receipts — money that was designated by the state to replace property taxes in communities that house gas or electric utility property, such as towers along major roadways holding up power lines that carry electricity.
Because land that supports such utilities could become never become tax ratables for the municipalities, and the role of supporting power and energy is viewed as vital to the state’s economy, New Jersey used to pay municipalities from the Energy Tax Receipts Property Tax Relief Fund. But that payment ceased in state fiscal year 2010.
The mayors of West Windsor and Plainsboro are making their displeasure known. At the Plainsboro Township Committee meeting on March 28 Mayor Peter Cantu said the League of Municipalities is actively trying to recover the money, and in an old battle there may be some progress this year.
“The history of this is interesting. They basically took over collection of those receipts with the understanding that they’d be returning them to the municipalities,” he explained.
If the state pays the municipalities, West Windsor would see a return of approximately $1.2 million. Mayor Shing-Fu Hsueh recently sent a letter to Governor Christie’s office along with charts showing the township’s total loss from energy tax receipts between 2001 and 2011. Hsueh went so far as to make the energy tax receipt issue the one negative component of his state of the township address on March 12.
“It has been frustrating to see that the state, while entrusted to collect energy tax receipts, actually kept more than $968,000 to date from West Windsor to balance the state budget. This lost revenue translates to more than 1.5 cents of our tax rate,” Hsueh said during his speech.
On Tuesday, April 17, Mayor Hsueh will be participating in a League of Municipalities press conference in Trenton. The mayor is on the league’s task force for return of the energy tax receipts.
Hsueh says that New Jersey’s current procedures are based on the collection agreement made with municipalities in the 1980s. In fiscal years 2005 to 2011 the state’s diversion of energy taxes grew from $72 million to $505 million. In 2008 the state’s funding for municipal revenue replacement was cut by $26 million; in 2009 it was cut by $32 million, and in 2010 there were losses of $271 million recorded.
In 2008 the township submitted $2.8 million in energy tax receipts and received $2.9 million in state aid. Since that year there have been no supplemental energy tax receipts and no municipal property tax assistance from the state. And in each of the last three years state aid decreased to $2.19 million, down from $3.16 million in 2007.
At the March 26 West Windsor Council meeting opinions were offered from either side of the dais, starting with Councilman George Borek.
“Certainly we’re putting this resolution forward to put onus on the legislators. When this bill does come before the state committee I’m sure that Linda [Geevers] and some of our other colleagues will be there testifying in support of this legislation because certainly someone else is holding our taxpayer money,” Borek said.
Alvin Lerner of Rainflower Lane spoke during public comment, calling the amount of money involved “just ridiculous.”
“Unfortunately the amount of money being withheld by the state has grown faster than taxes have slowed down. One of the principal objectives of these tax receipts was to offset citizens’ tax obligations, and it could be a major way to work with a large amount of money,” Lerner said.
He added that voting for a resolution was a good first step but he expects more action from Council.
“I hope that you will apply due diligence to the situation and help to adjust the bill to more fairly reflect the split between municipalities and the state,” he said.
