Extract From Report

Chairwoman Mayor Barbara Cannon, Sept. 1998 -

Table of Contents

Section	Page
Executive Summary	1
Historical Background	8
I. Tax Restructuring	11
II. Local Government Shared Services and Consolidation.......	20
III. School Regionalization and Shared Services	30
IV. Ending the Ratables Chase	36
V. Tax Administration	43
VI. Additional Recommendations	51

APPENDICES

Section	Page
A. Interim Letter of the Property Tax Commission	56
B. The Cost of Home Rule	59
C. Local School Taxes Report	79
D. Michigan’s “Proposal A”	83
E. REAP and REDI Proposal	98
F. Local Government Services for Sharing and Consolidation	103
G. Regionalization Advisory Panel Report	108
H. Economic Development Worksheet	128
I. The Hierarchy of Land Uses and Fiscal Impacts	131
J. Revaluation Shock Relief Proposal	133

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Commission Report's List of Summary Recommendations

Chapter I Tax Restructuring

1.0 Enact legislation that would allow municipal governments in urban aid-qualified communities to levy a parking, entertainment, or hotel room tax for the purpose of providing direct tax relief to property taxpayers.

Chapter II Local Government Shared Services and Consolidation

2.1 Establish a State program of financial assistance and incentives to encourage local governments and school districts to consolidate, regionalize, and implement new joint services.

2.2 Link any program of incentives and financial assistance for consolidation, regionalization, and shared services directly to providing property tax relief for the communities' residents.

2.3 Continue funding for the Joint Service Incentive Grant Program, which provides "seed money" to study or implement consolidation, and regional and shared service programs.

2.4 Amend current statutes to provide, at local option, that in instances of shared or merged services involving police, firefighters, and teachers, all contractual matters shall be subject to renegotiation with the shared/merged service provider.

2.5 Permit locally funded early retirement incentives or added pension credit programs for newly consolidated municipalities or new interlocal service programs.

2.6 Permit local units to "opt out" of Civil Service for purposes of interlocal and shared service programs.

2.7 Direct all State agencies to conduct a review of their rules and program requirements to identify those that restrict local shared efforts or cooperative activity.

2.8 Administratively provide that appointment of a joint municipal court judge shall be by the Governor based upon nominations made by the municipalities operating the joint municipal court.

2.9 Enact legislation to permit county governments and approved local cooperative pricing systems to establish programs similar to the State’s open-ended contracts.

2.10 Provide clear statutory authority for counties to serve as facilitators of intermunicipal joint service efforts. Along with legislative authority, provide limited financial assistance to help counties establish offices of shared service facilitation.

2.11 Statutorily require regular (at least annual) meetings between the governing bodies of adjoining municipalities, and between municipal officials and those of local school districts, authorities, and fire districts to discuss cost-saving efforts and possible shared services.

2.12 Direct State agencies, including the Local Government Budget Review Program, to make personnel available upon request to assist local officials with planning new interlocal activities and evaluating the feasibility of shared service programs.

2.13 Encourage local governments and school districts to make greater use of public-private efforts and the services available from non-profit organizations to help develop and implement regional and shared service efforts.

2.14 Establish a statutory budget cap exemption for interlocal service agreements. Provide a positive cap base adjustment to reflect a fixed amount of the interlocal appropriation as an inducement to establish shared service programs.

2.15 Revise the local budget law to permit budget transfers at any time during the budget year to fund new interlocal service agreements.

2.16 Assume the costs of the county prosecutors’ offices and the costs of providing court facilities, including construction costs.

2.17 Permit additional membership representation from participants in joint meetings established under the Consolidated Municipal Services Act, N.J.S.A. 40:48B.

2.18 Condition financial assistance or State aid upon participation in shared or regional service activities.

2.19 Amend the Municipal Consolidation Act to reduce the number of petition signatures.

2.20 Amend the Municipal Consolidation Act to permit the creation of a municipal consolidation study commission by ordinance of the local governing bodies without the need for a ratifying referendum in each municipality.

2.21 Amend the Municipal Consolidation Act to lengthen the time allotted for filing the study commission’s final report to at least no later than Labor Day (rather than nine months after the election of the consolidation study commission). Consideration should be given to provide for a permissive extension (up to a maximum of one year), if desired by the commission.

2.22 Eliminate the commission’s six month preliminary report and the Department of Community Affairs’ eight month evaluative review of that report.

Chapter III School Regionalization and Shared Services

3.1 Implement the recommendations of the New Jersey Regionalization Advisory Panel’s January, 1998 report.

3.2 Revise the funding mechanism for regional school districts to eliminate cost inequities and permit equal sharing of the benefits and cost savings possible from regionalization.

3.3 Direct the Commissioner of Education to develop a program to maintain and enhance local control of individual schools when districts regionalize.

3.4 Keep authority and control over certain school-related functions now exercised by the local boards of education at the sub-regional level when school districts regionalize.

3.5 Direct the Commissioner of Education to develop regional and shared service models for administrative and support functions.

3.6 Conduct studies to identify and develop models of shared administrative and management positions.

3.7 Help the county superintendents’ offices facilitate efforts to implement inter-district and joint pupil transportation services.

3.8 Direct the Department of Education and the Department of Community Affairs to work jointly to encourage interlocal efforts between school districts and municipalities.

3.9 Research and study current use of shared and regional approaches to general education and administrative services by local districts to identify suitable models.

3.10 Help increase parents’ and residents’ involvement in the educational process and the affairs of neighborhood schools.

Chapter IV Ending the Ratables Chase

4.1 Prepare a guidebook for municipalities and counties to determine the true costs and benefits of development, including an "Economic Analysis Worksheet" and techniques for implementation.

4.2 Provide planning board members with tools for understanding the costs and benefits of development and land preservation and provide financial and technical assistance to strengthen local planning.

4.3 Enable municipalities to enact "timed growth" ordinances that advance the State Plan, as a tool to control property taxes.

4.4 Support the use of impact fees to mitigate the cost of new development by providing additional revenue for schools, emergency services, and parks in areas that promote compact development.

4.5 Support the State Plan’s use by municipalities, counties, and State agencies as a means of holding down property taxes.

4.6 Amend Council on Affordable Housing (COAH) regulations to ensure that practices do not initiate a development cycle or a ratables chase. For the next allocation cycle, develop COAH formula consistent with the State Plan.

4.7 Support state funding for transportation, including mass transit, that meets local and regional needs.

4.8 Support a stable source of funding for open space and farmland preservation.

Chapter V Tax Administration

5.1 Establish a county-based assessment structure with strong State oversight and involvement to provide an environment conducive to ongoing assessment equity.

5.2 Mandate more frequent updates of assessment values by requiring assessors to use State-approved computer software.

5.3 Establish a schedule for property visitation.

5.4 Improve guidelines for assessment uniformity.

5.5 Create a State-funded program to absorb increases in the local property tax burden for a fixed period of time.

5.6 Guarantee the promised State incentive funding for the full five-year period, once local units agree to merge.

5.7 Provide State funding to "hold harmless" local units that experienced a reduction in overall State aid funding as a result of the consolidation.

5.8 Require municipalities participating in mergers to conduct and complete a revaluation prior to consolidation.

5.9 Provide State funding of the revaluation relief credits that municipalities are permitted to offer property taxpayers under the Revaluation Relief Act of 1993.

5.10 Use financial incentives and disincentives to encourage participation when there is only a small discrepancy between taxpayer assessments and current market values.

Chapter VI Additional Recommendations

6.1 Fund an independent statewide analysis of the equity issues surrounding "circuit breakers" established along intergenerational lines and withhold new programs until completion of that study.

6.2 Enact Governor Whitman’s proposed legislation that would move local school board member elections to the November general election.

6.3 Amend state law (C. 40A:10-52) to remove the barrier prohibiting municipalities and school districts from joining together for the purpose of providing joint health insurance.

6.4 Extend the open enrollment period indefinitely for municipalities wishing to enter the State Health Benefits Program (SHBP).

6.5 Develop a mechanism which permits and encourages adjacent municipalities to share the ratables derived from new development with regional impacts beyond the borders of the host municipality.

6.6 Enact legislation that will establish a system of multiple jurisdictional bargaining for public employees on a county, regional, or statewide basis.

6.7 Enact legislation that will limit the annual growth in public employee salaries to the rate of inflation as measured by the consumer price index for the New York and Philadelphia areas.

6.8 Examine the effectiveness of existing caps on budgets that contribute to property taxes.

6.9 Examine the question of seeking voter approval of all budgets that contribute to property taxes.

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