Yesterday the Assembly Commerce and Economic Development Committee released A-3971 which authorizes the issuance of “coronavirus relief bonds” by municipalities and counties. Specifically, A-3971 permits municipalities to issue bonds for the loss of revenue and/or unanticipated expenses directly attributable to the COVID-19 pandemic with appropriate safeguards and Local Finance Board oversight. This legislation is sponsored by Assemblyman Dan Benson and Assembly Speaker Craig Coughlin. Senators Troy Singleton and Vin Gopal introduced the Senate companion, S-2475, yesterday.
The League strongly supports the swift passage of the bill. We are currently living in unprecedented times of a global pandemic. Since mid-March, more than 1 million New Jersey residents have filed unemployment claims. The current public health emergency led to the shuttering of businesses, construction, courts, and schools. As a result, local governments have experienced a record decline in revenue from permitting fees, licensing fees, parking revenue, and court fines. At the same time, local governments also face income losses due to declining returns on investments. Further, there is the uncertainty of property tax collection and state aid revenues. Unlike previous emergencies, COVID-19 is a major revenue loss event, in addition to being an expense-related event.
A one-size-fits-all solution is not the best approach toward addressing revenue shortfalls and increased expenses. Municipal budgets continue to be lean and the current options available to municipalities may work for some municipalities but for most the pandemic will create long-term financial problems. Without this legislation to address the revenue shortfall, some municipalities would be required to take extreme measures that would gut local government and eliminate critical public service. Local governments need the flexibility that A-3971 provides to limit the impact on property taxpayers.
Time is of the essence and we would like to see further action next week. Please contact your State Senator and Assembly representatives urging them to support this much-needed tool for local governments in an unprecedented time and a loss of revenue that will not be recaptured not for several years, if ever.
Contacts:
• Michael F. Cerra, Assistant Executive Director, mcerra@njlm.org, 609-695-3481 x120.
• Lori Buckelew, Senior Legislative Analyst, lbuckelew@njlm.org, 609-695-3481 x112.