Secaucus residents could see nearly $3 million in annual tax relief if pending legislation in Trenton is approved by lawmakers in the fall.

As one of 14 towns included in the Meadowlands District, Secaucus comes under the jurisdiction of the New Jersey Meadowlands Commission (NJMC), a state agency founded to plan and oversee regional development in the Meadowlands District. Since the 1960s, some municipalities in the Meadowlands District have been zoned for uses that do not generate much tax revenue – such as parks – while others, like Secaucus, were zoned for office space, which can generate a lot of revenue. At the time, state legislators believed it was necessary to spread the financial benefits of development evenly throughout the district.
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“The day of tax-sharing has come and gone.” – Michael Gonnelli
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Thus, for the past 37 years Secaucus and seven other municipalities have contributed to a regional tax sharing pool, while other towns have received money from this pool.

Budget committees in the State Senate and Assembly have now passed bills that would end Meadowlands District tax-sharing, which Secaucus leaders and residents have long argued is unfair to the town.

Several municipalities in the Meadowlands support the proposed legislation and Gov. Chris Christie backs the bills’ intent.

Dates back to 1972

The regional tax-sharing program was established in 1972 to compensate the municipalities that were barred from developing environmentally sensitive parts of the Meadowlands. The program enabled all Meadowlands District towns to benefit from regional growth and ratables.

Secaucus taxpayers currently contribute nearly $3 million to the Meadowlands tax-sharing pool, and the town is the largest contributor in the district.

The town’s 2010 contribution to the tax-sharing pool is $300,000 less than in previous years, since the municipality’s contribution was recently reduced. Still, Secaucus has contributed more than $63 million to the pool since 1973, when the tax-sharing formula went into effect.

North Bergen, Carlstadt, Lyndhurst, Moonachie, East Rutherford, Little Ferry, and South Hackensack are the other municipalities that contribute.

Jersey City, Kearny, Rutherford, North Arlington, Ridgefield, and Teterboro receive money from the pool.

An idea whose time is done?

Under the pending legislation, the “giving” towns would be allowed to keep their resources. The current “receiving” municipalities would get paid from the state general fund, as is currently done in the Pinelands region and Highlands.

“My argument has always been that the Meadowlands District is no different than the Pinelands or the Highlands,” said Assemblyman Vincent Prieto (D-32nd Dist.), a Secaucus resident who has introduced legislation since 2006 to end tax-sharing. “There is no tax-sharing in those regions.”

Towns prohibited by the state from developing environmentally sensitive areas are, he said, compensated from realty transfer fees – most of which come from Northern New Jersey.

“The state has taken on the burden of providing for these other [municipalities] because it’s for the good of the whole state,” Prieto continued. “My argument is [that] the same should be done in the Meadowlands.”

Prieto is a cosponsor of A2939, one of the bills currently pending in the legislature.

With the State Senate version of the legislation, S2078, receiving co-sponsorship from Sen. Sandra Cunningham (D-31st Dist.) of Jersey City – one of the receiving towns – Prieto said, “It appears we may have good support for this.”

If Secaucus were allowed to keep the $3 million it currently contributes to the tax pool the money could be used to offset rising municipal expenses and the town could rely less on property tax increases.

Recent action

In a letter sent to the Secaucus Town Council on June 28, State Sen. Paul Sarlo, another supporter of the legislation, wrote, “I hope to have this legislation passed by both houses of the legislature and signed by the governor by the end of this year.”

Prieto worked closely with Mayor Michael Gonnelli and his predecessor, former Mayor Dennis Elwell, to end tax-sharing.

“I think we all feel that the day of tax-sharing has come and gone,” said Gonnelli. “There was a time when it was a good thing for Secaucus because we benefitted from regional state planning and we received a lot of ratables. But your ratable base only grows by the amount of property you have left. And we don’t have a lot of property left to develop. Those days are gone.”

Gonnelli, who has met with Frank Luna, Christie’s liaison in Northern New Jersey, said he believes the governor will sign the legislation if it passes the Assembly and Senate.

Not everyone enthusiastic

But while Secaucus is guardedly optimistic about the possible end to tax-sharing, other towns are nervously eyeing the proposed changes.

“I don’t object to the legislation so long as it does not change the tax formula itself,” said Kearny Mayor Alberto Santos. “If the only change is how the funds are paid, I don’t oppose this. But if there was an effort made to change the formula, or to reduce the amount paid to Kearny I would not support that.”

Kearny will receive $4 million from the tax-sharing fund this year, according to a spokesman for the NJMC.

Both versions of the legislation also call for the borough of Teterboro to be carved up and annexed to Hasbrouck Heights, South Hackensack, Moonachie, and Little Ferry, and for South Hackensack to be made into a contiguous municipality. (South Hackensack currently includes three non-contiguous regions.) Those proposals have met with resistance from elected leaders in Teterboro, Moonachie, and Hasbrouck Heights.

E-mail E. Assata Wright at awright@hudsonreporter.com.