Gov. Chris Christie has promised to close a loophole in New Jersey’s 2 percent property tax cap law by ending a practice by some municipalities of imposing “user fees” for certain services — and local mayors are not pleased about what they call another shifting of the financial burden from the state to municipalities.
While officials said a proposed bill would only affect new user fees, others were worried that current fees could be affected.
State Senate President Stephen Sweeney, D-Salem, Gloucester, Cumberland, is sponsoring a bill that bars cities and towns from charging new fees for services such as garbage pickup to help stay within the mandatory tax cap lawmakers approved in 2010. The proposal would prohibit user fees from being shifted out of the property tax base.
The measure could be introduced by Sweeney in the Legislature as early as Thursday.
Assembly spokesman Tom Hester Jr. said Speaker Sheila Oliver, D-Essex, Passaic, hasn’t talked with the governor about legislation targeting the fees, and there is no similar bill being drafted in that house.
Nonetheless, Christie guaranteed a new law would be signed by July 1 while speaking on Townsquare Media’s “Ask the Governor” radio program Monday night.
“The Senate president, the speaker and I are not going to permit the cap to be run around,” Christie said. “I am willing to guarantee you we are willing to pass a user fee prohibition between now and July 1.”
Under the cap, municipalities are required to craft local budgets that keep spending increases to under 2 percent a year, though exceptions are made for pension and health care costs and debt service. The law has helped slow the rate of property tax increases — to 2.4 percent last year — but New Jersey still has the country’s highest property taxes, averaging $7,758 per household.
Christie spokesman Michael Drewniak said via email Tuesday the issue is “the creation of new fees, say charging a fee for garbage disposal that had previously been a part of a municipal budget but a town now tries to take it outside the budget — and outside of the property tax cap — and charge a separate, new fee with the obvious intent of circumventing the cap.”
Drewniak added that the bill has not been introduced and referred further comment to Sweeney.
Bill Dressel, who represents local governing bodies as executive director of the League of Municipalities, said Tuesday he hasn’t seen details of the proposal and is unsure which fees would be included.
If municipalities are no longer allowed to charge fees for activities such as youth soccer, the programs are unlikely to survive, he said.
Dressel said mayors and other local officials are trying to manage their finances without reducing services, not circumvent the cap.
But Sweeney said a user fee is just another word for tax.
“A user fee for a municipally provided service is just another way of saying tax, and these attempts to get around the property tax cap are disingenuous and detrimental to homeowners,” said Sweeney.
He said municipalities must do more to control local property taxes, such as sharing more services.
The question over whether the language in the bill could affect current user fees was the concern of mayors such as Robert Romano, of Vineland, who worried about whether the city can keep the user fees to maintain municipal recreation fields as it deals with cuts to state aid and the end of Urban Enterprise Zones.
“That’s fine — if he’s going to subsidize our budgets,” Romano said. “We only really started fees in the first place so we could maintain the fields without taxes.”
The city charges a three-hour-per-field and -court user fee for all private groups, traveling teams and requests for groups not sanctioned by the city’s Recreation Commission. Residents are charged $25, doubling for nonresidents.
“It makes me laugh,” Romano said. “(Christie’s) the one saying he’ll never raise taxes, but everything he does is to cut municipal aid or fees. So we’ll again have to raise property taxes.
“All it does is shift it from a state burden to a municipal burden. He leaves it to mayors to raise taxes, so he doesn’t get the blame. … I’m sure most mayors feel the same way I do.”
In Wildwood, Mayor Ernie Troiano worried Tuesday about the city’s car-crash fee. Drivers in fender-benders in which fluid spilled onto the road are billed $750, while victims who had to be cut out of their cars were charged as much as $2,500.
At the time, city officials justified the fees by saying they mostly affect tourists and out-of-towners and don’t add to the tax burden.
“Any time you restrict a community from using user fees, it’s not a good thing,” Troiano said. “It’s difficult now to make ends meet, with the economy being what it is. I would like to understand exactly what it is he’s trying to do and give a better answer. But it depends. Is he talking about selective user fees or across-the-board user fees?”
And though it doesn’t apply to his city, he also had another question: “Is it going to eliminate beach fees?”
In Hamilton Township, the township has been charging a variation on a beach fee, a user fee for The Cove along Lake Lenape, since last summer.
“Who’s going to take over the cost of operations,” said Hamilton Township Mayor Roger Silva. “When they took away state aid, that didn’t leave us many ways to do things other than out-of-pocket.”
This summer was not likely to be impacted, Silva said, “But we’re going to find a different way (to fund operations) if the state is going to balance their budget on the backs of municipalities. It doesn’t leave much room to breathe.”
Atlantic City Administrator Michael Scott did not want to comment on any fees.
Staff Writer Derek Harper and the Associated Press contributed to this report.
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