Mayor Moench Calls for Legislature to Pass Local Finance Reforms

Bridgewater, NJ – Today, Bridgewater Mayor Matthew Moench sent a letter to Governor Phil Murphy and Legislative Leadership calling for them to take on a series of municipal finance reforms that would help municipalities, like Bridgewater, in dealing with budgetary issues as a result of the COVID-19 outbreak.

In the letter, Mayor Moench said, “The difficulties facing New Jersey’s municipalities will not discriminate based on population size or geography and in many instances, it will be towns like ours, that receive a significant portion of income from commercial sectors, that will feel impacts the greatest…we are facing an estimated loss of revenue of $1.8 million directly related to COVID-19 outbreak. In addition, we have at least another $250,000 of expenses directly related this pandemic…If these costs were passed on in their entirety to the Bridgewater taxpayers, we would be looking at a tax increase of over ten percent.  This is unacceptable for our residents already struggling related to this crisis.”

Mayor Moench proposed the following reforms on behalf of Bridgewater residents:

–         Authorize municipalities to issue a special emergency for COVID-19 expenses and raise those funds over five budget years. The statute is very limited as to what type of emergencies can be issued by a municipality and raised over three or five years. Most emergencies issued must be raised in the following budget year. We are asking for relief through legislative or administrative action for DCA to authorize CORONA-related expenses that are issued as emergencies to be raised over five years.

–         Create a mechanism where municipalities can address the loss of revenue over five budget years. Generally operating expenses cannot be paid with debt. The law allows us to issue Tax Anticipation Notes, but it is only for 12 months. Municipalities should have an ability to issue debt, preferably with no down payment, to provide funding for lost revenue and allow us to raise one-fifth of it every year for the next five years, and allow us to raise it outside the Levy CAP.

–         School Districts and Counties should share in costs of borrowing if tax income is delayed or reduced. If tax revenue collections are low or delayed and a municipality has to borrow money in order to provide payments to the County and Board of Education, the burden for paying interest on Tax Anticipation Notes should be shared by the County and the Board of Education.

Mayor Moench concluded, “I ask that you act quickly on these reforms so that municipalities will have additional tools at their disposal in addressing their budgets this year.  Enacting these reforms will also take the burden off the State by providing municipalities more ability to manage their budget on their own without relying on additional state aid that may never come.”