I. State Issues
a. State Budget Update
We are now less than 48 hours away from the midnight, June 30 deadline for the adoption of a balanced state budget. Without a balanced budget in place, a State shutdown could ensue for the second consecutive year.
As this is being sent (Friday AM), the Governor and the Legislative Leadership (Senate President Sweeney and Assembly Speaker Coughlin) remain far enough part that a State shutdown is a distinct possibility.
By now you have undoubtedly read press accounts regarding the issues on the table. To summarize, the Senate and Assembly passed a fiscal year (FY) 2019 budget which relied upon an increase in the Corporation Business Tax (CBT) to provide the revenue for additional spending. The Governor remains committee to a millionaire’s tax and returning the state sales tax to 7%. The Governor offered a compromise, which was essentially a reduced CBT increase, reduced millionaire’s tax and phase-in on the sales tax increase. The Legislature countered with a proposal to increase the real estate transfer fee on transactions greater than $ 1 million and the extension of a tax on seasonal, primarily shore rentals. Yesterday, the Governor was highly critical of the proposed tax on rentals, calling it a tax on the middle class. Thus, while the two sides appear to be moving closer on their respective revenue projections and estimates, substantive differences appear to remain over how to fund portions of the state FY 2019 budget.
To date, the FY 2019 budget language keeps the energy tax receipts (ETR) off-budget, as the League requested.
Negotiations continue and a deal could be struck and in place before tomorrow night. But in the event of a State shutdown, the League will provide you with updates in as timely a fashion as possible. Please also monitor the League website (www.njslom.org) and social media feeds on twitter, facebook and LinkedIn.
Also in the event of a shutdown, the League will push out through these same channels reminders that even when there is a state shutdown, municipal governments continue their work and municipal beaches and parks are open for business. We would suggest you also communicate that message to your residents and if you use social media, please repost or share any such reminders we push out.
Contact: Michael F. Cerra, Assistant Executive Director, mcerra@njslo.org, 609-695-3481 x120.
b. Charitable Trust Law Effective July 3
Taking effect on July 3,
P.L. 2018, c. 11, permits municipalities, counties and school districts to establish one or more charitable funds, each for a specific public purpose, and permits property tax credits in association with certain donations. However, for practical purposes, the Division of Local Government Services must first adopt regulations before a municipality can implement such charitable funds. (For more on the law, please see our
blog post.) In preparation for the law, the Division has been drafting regulations and working with stakeholders, including the League. We anticipate that the rules will be adopted using the special adoption procedure provided for in P.L. 2018, c.11, which would make them effective upon filing with the Office Administrative Law (OAL), with a 60 day comment period that starts with an appearance in Register. It is anticipated that the Division will issue a Local Finance Notice providing further technical guidance on the new law. We will continue to keep you posted.
Contact: Lori Buckelew, Senior Legislative Analyst,
lbuckelew@njslom.org, 609-695-3481 x112.
c. Legal Update
i. Janus Decision: SCOTUS Ruling Restricts Public Sector Unions’ Power to Collect Fees On Wednesday, the Supreme Court of the United States (SCOTUS) issued its ruling in Janus v. AFSCME Council 31. This highly anticipated case involved a challenge to the ability of public sector unions to force nonmember government workers to pay agency fees. In a 5-4 decision, the Court ruled that “States and public-sector unions may no longer extract agency fees from nonconsenting employees” reasoning that such a scheme “violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.”
For a more detailed analysis on this ruling including the municipal impact and the potential for conflict with the recently enacted Workforce Democracy Enhancement Act, please see the League’s recent blog post, here. In addition, you may find informative the analysis written by League Labor Relations Counsel, Joseph Hannon, Esq., and Jennifer Roselle and Ryann Aaron from the Genova Burns law firm. This can be read, here.
Contact: Frank Marshall, Esq., League Staff Attorney, FMarshall@njslom.org, 609-695-3481 x137.
ii. SCOTUS Issues Sales Tax Ruling Which Could Benefit NJ and Property Tax,
Payers
Last week the Supreme Court of the United States (“SCOTUS’) released its opinion in, South Dakota v. Wayfair Inc., which addresses a state’s authority to require internet retailers to collect sales tax. The Court ruled that the proliferation of internet retailers has changed the nature of commerce. And, that this change has resulted in the Court’s own precedent, which required a retailer to have a physical presence in a state before it could be subject to sale tax collection requirements, to now be obsolete.
Further information on this decision and the potential municipal impact can be found by reviewing the League’s recent blog post, here.
Contact: Frank Marshall, Esq., League Staff Attorney, FMarshall@njslom.org, 609-695-3481 x 37.
iii. State High Court Rules Appeal of Zoning Permit a Substantive Right; Must Be
Heard By Zoning Board
The League would like to alert our members to a recent State Supreme Court ruling that will undoubtedly impact how municipal zoning boards handle appeals of zoning permits. Earlier this week the NJ Supreme Court issued its decision Mary Harz v. Borough of Spring Lake, which dealt with issues surrounding the right to appeal zoning decisions by interest parties and the NJ Civil Rights Act.
In this case, the Court ruled that an interested party has the statutory right for an appeal to be heard before the zoning board and that this is a substantive right, the violation of which is subject to the remedies afforded within the Civil Rights Act. While these rights and the possibility for a civil rights violation were found to exist, the Court refused to require an appeal hearing when the complaint from the concerned party has already been addressed by the zoning officer or other municipal official. This overturned the contrasting decision from the Appellate Division which would have seemingly provided a right to a board hearing regardless of the underlying matter becoming moot. The Court’s common sense ruling provides a more efficient framework for dealing with appeals of zoning decisions.
To view more about the Court’s decision please see the League’s recent blog post here.
Contact: Frank Marshall, Esq., League Staff Attorney, FMarshall@njslom.org, 609-695-3481 x137.
d. Animal Cruelty Enforcement
On June 25th, both houses passed and sent to the Governor A-4225/S-2689, which would change the effective date of P.L. 2017 c.331 regarding the animal cruelty statutes.
On January 16 of this year, former Governor Christie signed into law a bill that enacted major reforms, designed to improve enforcement of the State’s animal welfare and animal cruelty statutes. In response to reports of improprieties, the law eliminates the enforcement authority of the New Jersey Society for the Prevention of Cruelty to Animals. Instead, the law implements a joint municipal-county system. This bill delays the effective date of portions of that law from August 1, 2018 to February 1, 2019.
If you recall we previously provided you with a clarification of the law. Click here for that May 14 communication. The Governor now has 45 days from June 25 to act on the bill. In the event that he signs the bill into law, the League will provide you with a summary of the new provisions.
For a summary of the bill, please click here for the statement of the Assembly budget committee.
Contact: Michael F. Cerra, Assistant Executive Director, mcerra@njslo.org, 609-695-3481 x120
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