Mutiny in the Meadowlands
June 11th, 2011 by Chris Sturm
The Meadowlands’ long-standing and nationally-renowned regional tax sharing program is at risk. For over 40 years, this system has enabled sound regional planning and environmental principles to guide the area’s renaissance, rather than competition for ratables.
Simply stated, Meadowlands communities with substantial new development contribute 40 percent of new property tax revenues (less what’s needed to educate students) to a fund, which is then shared among communities without much new development.
On May 13th, officials from the seven towns that owe money to the tax-sharing fund announced that they would not be making payments. (Two of those towns have since paid up, under pressure from DCA according to a report in the South Bergenite.) Kearny, which is owed money, filed a formal legal complaint in Superior Court on June 2nd to compel the court to force the five remaining municipalities to pay.
The Meadowlands regional planning program has transformed the region from a blighted area dominated by landfills into a prosperous, healthy place to live, work and play.
Next Thursday, the Senate Budget and Appropriations committee will consider S2908, a bill that would require the state’s general fund to provide the monies (totaling about $7 million per year) needed to make the payments, rather than the region’s fastest growing towns. These towns argue that economic conditions make it impossible for them to pay. While they are facing challenging times – so is every other municipality in the state. And that does not mean that the regional tax sharing system is not working, or that the taxpayers of New Jersey can or should shoulder their property tax obligations, as proposed by S2908. Regional tax sharing in the Meadowlands is highly effectively and should not be replaced with a state-funded property tax subsidy.
That said, it may be time to examine whether the Meadowlands tax sharing formula should be adjusted or updated. The Legislature has made other adjustments in the past. In particular, it may be time to find a new way to ensure that payments do not fluctuate significantly from year to year, or if they do, to exempt them from the 2% property tax cap. (This year, the New Jersey Meadowlands Commission was unable to fund a “stabilization fund” that had prevented towns’ payments from increasing more than 5% from the prior year.)
The Meadowlands regional planning program has transformed the region from a blighted area dominated by landfills into a prosperous, healthy place to live, work and play. This transformation was enabled by the regional tax sharing system, created by the legislature in 1972, which ensured that the regional plan in the meadowlands was fair to all municipalities. The tax sharing system was upheld by the New Jersey Supreme Court in 1972, and has been in place for nearly forty years, becoming a national model for sustainable regional planning during that time.