Who is really responsible for New Jersey's highest-in-the-nation property taxes?

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We frequently hear speeches from state leaders these days about how more must be done on the municipal level to share services and slash spending, but local officials insist the folks making the speeches are largely responsible for the problem.

According to Michael Darcy, executive director of the New Jersey State League of Municipalities, towns don't have a choice to not do their jobs. They just have to find the most efficient and effective ways to get the job done, which means they've got to get the money from somewhere.

"We've seen a reduction in revenue sources, things like energy tax receipts and certain state aid packages," he said. "The state is redirecting some of that revenue to handle the state’s revenue shortage. Municipalities then have to make up that revenue shortage through the property tax."

Darcy said there is an energy tax receipt collected by the state for energy infrastructure, that runs all over New Jersey on different municipal properties.

"That money was supposed to be redirected back to the municipalities on a formula basis, based on how much infrastructure is in the town," he said. "But that money has been 'stuck' at the state level for many years – the state is keeping it for its own use."

He added if a town or even a school doesn't get the money they were counting on from the state, that may mean "either cutting services that will be considered vital, or postponing programs and postponing improvements that people would like to see and may be linked to economic development. When the state can't solve its financial problems and its revenue shortfalls, it affects the local municipalities' ability to keep those property taxes down."

Another big problem is that the Transportation Trust Fund is empty.

"This means the state cannot then fund the local road maintenance, engineering and construction either, and that means that the local officials have to use the property taxes to build and maintain those roads," Darcy said. "Municipalities have to continue to keep those roads open, have to continue to do public safety services, have to pay their bills. They don't have a choice.”

Darcy said the state's problems are everyone's problems.

"We're all residents of New Jersey, so when the state sneezes, the municipalities catch cold – you don't blame the patient when they're sick," he said. "We're not saying the state is placing its burdens on municipalities; the state has to do what it needs to do to take care of the state, we understand that. It's just important to remind the state and the residents of New Jersey there are effects on the local level when the state takes an action. We are one large state, and everything is connected."

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