CAPE MAY – At its meeting July 5, Cape May City Council passed a resolution developed by the New Jersey League of Municipalities urging swift passage of New Jersey Senate Bill S-330. Across the county, other municipal governing bodies are following suit.
For decades, the state has collected energy tax receipts (ETR) from utilities located within municipal borders. The intent of the program was to generate revenue that municipalities could use to relieve property tax burdens. Instead, the state has skimmed funds off the total revenue amounts and diverted those funds to other state priorities for decades. Over time, this has amounted to billions of dollars lost from potential property tax relief.
Once the state began collection of the tax, diversion became the norm. The funding that is returned to the municipalities comes in a form euphemistically called state aid. The state aid in Cape May County municipal budgets today is almost entirely comprised of ETR funds.
The bill currently making its way through the state Legislature mandates the restoration of additional ETR funds to the municipalities, requiring that the additional monies be directed to municipal property tax relief. The bill was introduced in January, unanimously passed the Senate in March, and is pending in the Assembly, where it was referred to the Community Development and Affairs Committee March 7.
