The Meadowlands inter-municipal tax sharing formula is being evaluated to make it more predictable, according to New Jersey Meadowlands Commission Public Information Officer Brian Aberback.
The program that allows the Meadowlands region’s towns to develop is being re-evaluated by the Institute for Meadowlands Studies at Rutgers University. Through the state’s tax sharing program, started in the early 1970s, the towns in the Meadowlands region that are allowed to develop must pay into a tax pool so that other towns that can’t develop for environmental reasons can offset the loss of tax ratables.
The evaluation, due April 16, comes at the request of Gov. Christopher Christie. He asked the NJMC to study potential changes in the tax sharing formula that would provide greater predictability and decrease volatility for municipalities in the taxing district, according to Lisa Ryan, public information officer for the NJ Department of Community Affairs (DCA).
“Our plan is to build a middle school if we can find a way to fund it.” – Michael Gonnelli
The NJMC and Listokin met with Meadowlands District mayors, the governor’s office, the DCA and other local representatives on March 28 to give the affected communities an opportunity to share their thoughts on how to improve the formula.
Expecting a shift in the formula
Secaucus Mayor Michael Gonnelli – whose town is the highest contributor into the tax pool with 88 percent of the town in district – attended the meeting and said that he is optimistic that the formula will change to a more fair distribution.
“A lot of very positive things came out of it,” said Gonnelli. “He listened. He understands what the issues are,” said Gonnelli about Dr. Listokin.
Listokin did not return the Reporter’s calls for comment.
For years Gonnelli has pushed to have the tax-sharing program completely eliminated. He has argued in the past that the program is outdated and that it doesn’t take into account the costs municipalities bear in capital improvements and in providing municipal services.
Secaucus has paid in excess of $72 million to the tax sharing program since its inception.
Contributions from Secaucus, North Bergen, Moonachie, Carlstadt, Little Ferry, Lyndhurst, and South Hackensack go to six other Meadowlands District towns: Jersey City, Kearny, East Rutherford, Rutherford, North Arlington, and Ridgefield.
Gonnelli said that while he understands the need in a district like Kearny that is 50 percent within the district, he doesn’t agree with the percentage that his town contributes. The town currently holds onto 60 percent of its taxes and pays 40 percent into the tax sharing pool. He hopes to see an increase in the local tax retention rate to 70 percent.
Seeking increase in school credit
“They have to add a credit for capital for children, for roads, bridges, things that need to be repaired,” said Gonnelli.
The tax-sharing formula takes into account that the municipality gets a $14,000 credit per child living in district from the state.
Of the 2,211 pupils enrolled in the school district, 583 live in the Meadowlands district. Gonnelli said that this calculation is three years old and that with the Xchange, Baker and other developments the number could be close to 700.
“That number should go up by at least another $4,000 or $5,000 dollars. If we actually got that credit for capital improvements, we could turn around and finance the construction of a new school,” said Gonnelli.
“Our plan is to build a middle school if we can find a way to fund it.”
Seeking other sources of funding in Trenton
Assemblyman Vincent Prieto, head of the Budget Committee, said last week that he is working with the mayors within the Meadowlands district to determine how the legislature could help lessen the tax-sharing burden.
“I am working on a permanent funding solution with the Department of Community Affairs and the administration,” said Prieto. He said that he was working on finding a sustainable reccurring revenue source to help the tax-sharing municipalities. He said the legislative proposal would have to be something that the governor’s office would be open to and willing to sign.
“We want to be mindful of the receiving municipalities [and] that they need this money to operate,” said Prieto. “I am supportive of restructuring the formula to one that would be acceptable to all municipalities…the status quo is not acceptable.”
The NJMC plans to meet with the district municipalities once the evaluation has been completed. Any changes that are made to the formula must be approved by the New Jersey legislature.
Adriana Rambay Fernández may be reached at email@example.com.