March 2, 2022

Re: S-330 – Energy Tax Receipts Tax Relief Fund Restoration 

The Senate has included S-330 on tomorrow’s board list for a vote. The bill would increase distribution to municipalities from Energy Tax Receipts Property Tax Relief Fund (ETR Aid) over two years to restore municipal aid reductions and also requires additional aid to be subtracted from municipal property tax levy.
 
S-330 amends P.L.1997, c.167 to require the distribution of additional State Aid to municipalities. The bill will begin the restoration of approximately $331 million in reductions to Consolidated Municipal Property Tax Relief Aid (CMPTRA) and Energy Tax Receipts Property Tax Relief Aid first imposed in FY 2009 due to State budget constraints.
 
The League has long advocated the restoration of this funding and we have written you in the last few weeks and asked you to reach out to your Senator and urge them to support S-330. Following that, the bill was favorably reported out of the Senate Urban and Community Affairs Committee on January 27, as well as Senate Budget and Appropriations Committee on February 28. Both committee votes were unanimous and bipartisan.
 
The Senate Budget and Appropriations Committee made two significant amendments to the bill. The first changes the phase-in of the restoration from 5 years to 2 years. The second amendment would prohibit a municipality from anticipating the additional State aid payment distributed from the ETR aid for purposes of preparing its annual budget; and provide for an amendment to its local budget to properly reflect the total amount distributed to the municipality from the ETR aid.
 
While we continue to support the restoration of the ETR funding back to municipalities, we believe the amendment that deals with the local municipal budget and requires an amendment to lower the levy due to receipt of additional ETR funding to be unnecessary. This concern will be brought to the attention of the sponsors in both the Senate and the General Assembly. To date, there has been no movement on an Assembly companion bill.