In the coming days, the Department of Community Affairs will be notifying all 564 municipalities that the State aid they can use in support of municipal budgets being adopted in the coming months will be slashed by $150 million from what was available in last year’s budget. Their reduced aid for their budgets is due to the elimination of a $150 million “Municipal Relief Fund” that had been funded from income tax collections and parceled out based on a fair funding formula.

What they will not be told is that the State budget used that $150 million (and then some) to fund a few dozen special line items doled out based on political favoritism – outside of any fair funding formula.

Republican members of the Senate have written to the Governor warning that the diversion of fair formula-based funding to special line items awarded based on this political favoritism—and outside of a formula—is not only bad policy, it violates the NJ Constitution.  They will work with any aggrieved taxpayers, municipalities, schools, or counties willing to litigate the matter.

New Jersey Constitution, Article VIII, Section I, paragraph 7, was approved by the voters approximately 50 years ago in 1975.  It reads as follows:

No tax shall be levied on personal incomes of individuals, estates and trusts of this State unless the entire net receipts therefrom shall be received into the treasury, placed in a perpetual fund designated the Property Tax Relief Fund and be annually appropriated, pursuant to formulas established from time to time by the Legislature, to the several counties, municipalities and school districts of this State exclusively for the purpose of reducing or offsetting property taxes.