Local officials blast state for keeping utility fees
BY VINCENT TODARO Staff Writer

SPOTSWOOD- For borough officials, a simple letter from the New Jersey State League of Municipalities represents another example of how the state's actions are undercutting local governments.

Council President Curtis Stollen mentioned the letter during the April 21 Borough Council meeting, as it referred the state taking utility revenue away from municipalities. He said the letter demonstrates how "morally corrupt the state is at handling our tax dollars."

The outrage comes, not from recent state aid cutbacks to towns like Spotswood, but rather a funding change made in the 1980s. Stollen said the state decided to have public utilities pay franchise fees and gross receipt fees directly to Trenton rather than to the towns from which they were garnered. The towns had used the revenue to help with their budgets, but at the time the change was made, the state said it would funnel the money back to municipalities.

That never happened, Stollen said, leaving towns with holes to fill in their revenue streams. He said the money was supposed to come back to towns through a formula-driven program, but has instead been used for the state's general fund budget.

"The state diverted proceeds to its own general fund," he said.

"Taxpayers in this state are just being fleeced. It's outrageous," he said.

Utilities collected the franchise fees from customers and then, under the old plan, passed the money along to towns for use of right of ways and other public property, he said. It was considered a cost to customers for delivering the service and a way of paying back towns for use of their land.

"The state began collecting the fees as one entity in the 1980s, instead of us," he said. "It was supposed to be given back to the towns on a formula-driven basis but never was."

CouncilwomanMarge Drozd said Trenton's use of such funds is ironic because the state has been telling towns to charge their own fees for certain services. Using those monies would be a way to mitigate the loss of state aid.

Stollen said it's hard to determine just how much the state's actions cost Spotswood, and said the incident reflects the "unending appetite for consumption of our tax dollars in Trenton." He said the formula-driven funding would have provided towns with some property tax relief had the money been funneled back.

Spotswood is still reeling from the loss of about $360,000 of CMPTRA (Consolidated Municipal Property Tax Receipts Aid) state aid this year. The school district, however, saw its state aid increase by about $800,000.

Stollen expressed frustrations about the way state aid is doled out in general.

"It's like the private piggyback of the Legislature," he said, noting that it sometimes seems politically motivated, with some towns receiving aid that did not even apply for it.

Drozd said the state's advice about collecting more fees hardly helps small towns like Spotswood, which have limited resources.