History of Energy Tax Receipts in NJ

Every year during the State’s budget debate, “State Aid to Municipalities” is discussed.

But what is that? 

Originally, these were taxes assessed and collected locally from utilities for the use of their public land, and the funds went into municipal programs and services. Overtime, for the convenience of the public utility companies, the State began collecting these funds so that public utilities did not need to submit taxes to multiple municipalities, they were able to pay one lump sum. Ultimately the State rebranded them as local municipal revenues. Currently, these same funds are referred to as “State Aid” programs, or replacement programs intended to replace property tax relief funding. Overtime, this forced municipalities to turn to property taxes to supplement funding.