New Jersey’s Unequal Aid To Municipalities

The proposed New Jersey State aid to municipalities for 2007-2008 is now available for review. Under Governor Jon Corzine’s 2008 state budget proposal, municipal aid will increase by $32.6 million. Most municipalities will receive a 2 percent increase - modest relief after five years without an increase for all but “distressed” municipalities and those receiving “Christmas Tree” and other grants.

As with state aid to schools, municipal aid reduces the amount local government must fund through property taxes. However, both forms of aid vary greatly by municipality, whether viewed in terms of per student or per resident.

As required by law, each Legislative Distinct (LD) has approximately the same number of residents, and yet proposed municipal aid ranges from a low of $23,625,299 in LD-24 to a high of $119,422,814 in LD-29. The proposed average municipal aid per Legislative Distinct is $43,178,397.

Proposed state aid for each municipality and Legislative District can be viewed here and New Jersey population statistics as of December, 2006 can be found here.

The municipal aid figures in the state’s report noted above do not include all forms of state municipal aid - extraordinary aid, special aid, “Christmas Tree” and community development grants, etc.

Extraordinary aid is a budgeted amount “set aside to help towns with unexpected problems such as emergency costs or the loss of a major taxpayer”. Corzine’s budget proposes cutting Extraordinary aid by $18 million, from $43 million to $25 million. Municipalities receiving these funds will be determined later in the year.

Corzine has proposed a $37.3 million increase in Special aid, from $94.7 million to $132 million in the 2008 budget. This special aid will be granted to "distressed” municipalities that will be identified at a later date.

“Christmas tree” grants are not contained in the budget and are added by the state’s legislature “under a largely secretive process”. The governor has the authority to eliminate or approve them when signing the budget legislation. Spending on this form of municipal aid had more than doubled in the past five years, to $378 million last year.

The practice is shrouded in secrecy, and often happens in the early hours of the morning as a constitutional deadline for a balanced budget nears. Lawmakers offer no public reasons or justifications for the extra money.

Legislators seeking these grants must pass through the governor's office to seek support from the person who must ultimately approve the budget.

Given the ongoing criminal investigation surrounding the awarding of “Christmas Tree” grants, there’s a high probability that this form of municipal aid will be greatly reduced in the next fiscal year.

"Christmas trees this year will go from the Christmas tree in Rockefeller Center to the Peanuts' Christmas tree," Senate President Dick Codey said. The proposed $33.3 billion budget should be more than enough to keep those special interest stockings stuffed.