Will more than $7.4 million in lost tax revenue get Gov. Christie’s attention? Seven Meadowlands District towns, including Secaucus, are betting that it will.
A month after Secaucus, Moonachie, and Carlstadt said they would withhold their 2011 contributions to a controversial regional tax-sharing fund, four other Meadowlands towns are now prepared to follow suit.
Secaucus town officials planned a press conference with elected leaders from other Meadowlands District municipalities to jointly announce that they will all withhold their contributions to a regional tax sharing pool that requires them to pay into a fund that is ultimately distributed to six other district municipalities. The press conference was scheduled to take place at noon on Friday, May 13 in Secaucus Town Hall.
“There’s a problem here.” – Michael Gonnelli
In a show of support, officials from East Rutherford and Rutherford, which currently receive money from the tax sharing fund, were also expected to participate in Friday’s event.
Regional tax-sharing was established to compensate the municipalities that were barred by the state from developing environmentally sensitive parts of the Meadowlands. District towns like Secaucus that were allowed to develop were required to contribute to a fund to compensate municipalities that were prohibited from development.
“The intent behind this is to get more exposure [to this issue] so that legislators in Trenton can see that there’s a problem here,” said Secaucus Mayor Michael Gonnelli last week. He added that after Secaucus, Moonachie, and Carlstadt announced last month that they would withhold their state mandated tax sharing contributions, they received “no response” from the administration of Gov. Christopher Christie.
“The only people in Trenton who responded were the people who are already in support of revamping or eliminating tax-sharing,” he said. “We hope this unified position we’re taking gets more attention.”
Development comes with economic burden
Secaucus is one of 14 towns that come 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, about half of these municipalities have been zoned for uses that do not generate much tax revenue – such as parks – while others, like Secaucus, were zoned for commercial development, which generates ample tax revenue.
Secaucus taxpayers currently contribute $2.6 million annually to the Meadowlands tax-sharing pool, and the town is the largest contributor in the district. In the past annual payments were sometimes as high as $3 million. In total, Secaucus has contributed more than $68 million to the tax pool since 1973, when the tax-sharing formula went into effect.
North Bergen, Moonachie, Carlstadt, Little Ferry, Lyndhurst, and South Hackensack are the other municipalities that contribute.
East Rutherford, Rutherford, North Arlington, Ridgefield, Jersey City, and Kearny receive money from the pool. Teterboro, which is also part of the Meadowlands District, neither contributes nor receives money from the tax-sharing pool.
According to an NJMC spokesman, North Bergen is expected to contribute $849,612 to the regional tax sharing pool this year; Carlstadt is expected to pay $2,064,042; Moonachie is expected to contribute $415,962; Little Ferry is expected to pay $525,913; Lyndhurst’s expected payment this year is $642,091; and South Hackensack is expected to contribute $320,720.
The first installments of these payments were due to the state two weeks ago.
For more than a decade, elected officials from the contributing Meadowlands towns have lobbied for the tax-sharing concept to be abolished, arguing that it unfairly penalizes taxpayers in their municipalities.
They argue, among other points, that regional tax sharing does not take into account the economic impact of development – including increased traffic, the need for added emergency services, and infrastructure maintenance costs. The benefits and costs of development and environmental conservation, they argue, should be borne equally by all New Jersey taxpayers, not just ones from a handful of municipalities.
Over the last month the governing bodies of the contributing towns have passed a resolution asking Gov. Christie and the state legislature to explore “alternative funding sources” for the Meadowlands region. Parking surcharges and fees on entertainment events in the Meadowlands are among the sources recommended in the resolution.
The resolution states that “all payments to the [tax-sharing] fund [will] be held in abeyance” until this matter is addressed by the legislature.
The towns have recommended that the Meadowlands District be supported by the state, in much the same way New Jersey supports the Pinelands and Highlands regions.
“We should be funded by the state in the same way,” said Gonnelli.
‘The bargain struck’
But not every municipal leader believes tax-sharing is past its prime.
Kearny receives $4 million under the regional tax-sharing formula and the city is the biggest recipient of money from the tax-sharing pool. Mayor Alberto Santos said last week the state can’t undo what’s already been done.
“If the [Meadowlands] District were to be established from scratch today I think the Pinelands would be an appropriate model,” he stated. “But the Meadowlands District was established 40 years ago and a key lynchpin was regional zoning. So, some municipalities were zoned for commercial development, retail, hotels, offices; others were not. [It was agreed that] in return for that zoning, those municipalities that did not benefit from development that would generate tax revenue, would receive some form of compensation. That was the bargain struck.”
He notes that more than 52 percent of Kearny’s total land area is within the Meadowlands District and is zoned by the NJMC as open space, wildlife management areas, and solid waste landfills with little land available for commercial development or other ratables.
While Santos acknowledges that Secaucus has contributed nearly $70 million since 1973, he added that, “Secaucus also generated $655 million in taxes between 1973 and 2005, according to a study on tax sharing that was done by Rutgers University.”
Jersey City’s Jerramiah Healy, mayor of another Meadowlands municipality that receives money from the tax sharing pool, does not advocate making changes to the formula. City Spokeswoman Jennifer Morrill said Wednesday, “The City hopes to be paid in accordance with the guidelines in place.”
State legislators, including Sen. Paul Sarlo (D- 36th Dist.) and Assemblyman Vincent Prieto (D-32nd Dist.), were expected to announce on May 13 legislation they plan to introduce to remedy the tax sharing standoff.
A Christie spokesman said, “Should…legislation [regarding this matter] reach the governor’s desk, it, like any other bill, will receive careful consideration and analysis in the 45 days the governor has to review legislation before him. We have no other comment on the matter at this point in time.”
E-mail E. Assata Wright at firstname.lastname@example.org.