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Property Tax Impact of Pension and Benefits Commission’s “Roadmap to Resolution”
The League of Municipalities in partnership with New
Jersey School Boards Association today issued a report assessing the
impact of the local boards of education assuming the cost of the local
education retiree health benefits, which is currently a state
obligation, as well as the new retirement plan for local (K-12)
education employees as suggested by the Governor’s “Roadmap to
Resolution” report. View Report (PDF)
League President and Piscataway Mayor Brian C. Wahler
stated that “Our major concern, and those we believe of property
taxpayers, is whether this roadmap is cost-neutral. We are concerned
that the proposed savings resulting from the health care proposals is
unlikely to offset the shift of the unfunded liabilities to the local
level. This report illustrates in real numbers what the local
property tax impact will be shifting the state’s cost to local property
taxpayers.”
This policy neutral analysis, using information from the
NJ Transparency website, was prepared by Raphael J. Caprio, Ph.D.,
Director of Bloustein Center for Local Government Research, Rutgers
University to provide an informed answer to the potential (and
estimated) impact on each municipality for each one % “employer”
contribution that would need to be raised on the local level should
local boards of education be asked to fund part, or all, of the employer
Teachers Pension Annuity Fund (TPAF) contribution.
Since the potential employer “pension match” is
still a hypothetical, the 1% liability is used so the various scenarios
or policy proposals can easily be calculated.
League 1st Vice President and West Caldwell Mayor Joseph
Tempesta added that “Local governments, and our employees, have made
their pension and health contributions every year. The local systems
are fiscally sound and should not be asked to absorb the costs of the
State pension plans for teachers, which are currently the responsibility
of the State. This policy neutral report provides Mayors and local
property taxpayers with a tool to analyze the impact of the shifting
cost to the local governments.”
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For further information contact:
Brian Wahler, League President and Mayor of Piscataway at 732-562-2301
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