Energy Tax Talking Points

Talking Points on A - 2753 / S-1923 Requiring Direct Payment of Energy Taxes to Municipal Government

  • Taxes on gas and electric utilities were originally collected by the host municipalities, and when the State made itself the collection agent for these taxes, it promised to return the proceeds to municipalities for property tax relief.
  • Just as municipalities collect property taxes for the benefit of school districts, counties, and other entities; the State is supposed to collect Energy Taxes for the benefit of municipal governments.
  • For years though, State officials have diverted funding from Energy Taxes to plug holes in the State budget and to fund State programs.
  • The cumulative impact of years of underfunding has left many municipalities with serious needs and burdensome property taxes.
  • Municipalities lost $331 million in combined Energy Tax and Consolidated Municipal Property Tax Relief Aid (CMPTRA) funding in Fiscal Years 2009, 2010, and 2011, while also being denied scheduled incremental funding.
  • A-2753, sponsored by Assemblymen Daniel Benson and Wayne DeAngelo, and S-1923, sponsored by Senator Linda Greenstein, would restore the $331 million in municipal property tax relief funding, ensure that each municipality will be restored to the 2007 (SFY 2008) Energy Tax Receipts/CMPTRA level and adjust that amount to account for inflation.
  • The bills would require certain energy tax receipts to be paid directly to municipalities and, thereby, would assure local property taxpayers compensation for hosting transmission facilities and lines that allow gas and electric energy corporations to serve customers and conduct business in our Garden State.
  • The time has come to restore to local budgets the millions in property tax relief that have been annually diverted to meet State needs.

The League of Municipalities salutes the sponsors for listening to the Mayors in their districts and all around New Jersey and for advancing this legislation.

Additional Information

For additional information, visit the League of Municipalities' Energy Tax Restoration Resource Center. You can also contact Mike Cerra or Jon Moran at 609-695-3481, ext. 112 or ext. 121 or email Mike Cerra or email Jon Moran.