Mutiny in the Meadows

By Ron Leir


Toxic fumes are spewing from the Meadowlands but they’re not coming from the marshes.
The “have” and “have-not” communities that are in the New Jersey Meadowlands Commission (NJMC) district are duking it out over the meadows’ Inter-Municipal Tax-Sharing formula. And those municipalities that feel they’ve been slighted for years are threatening to throw a knock-out punch to the formula by withholding the annual tax-sharing payments they’re obliged to send.
How the NJMC will respond to the mutiny remains to be seen.
The first of three installment payments for 2011 was due May 15. NJMC spokesman Brian Aberback said that as of last Thursday, the commission had received no payments.
Asked whether the NJMC had consulted the state Attorney General’s Office, Aberback declined comment.
Among those leading the protest is the Township of Lyndhurst, which owes $564,000 to the tax-sharing fund for this year. Lyndhurst is one of seven communities required to make the annual contributions. The others are Secaucus, North Bergen, South Hackensack, Carlstadt, Little Ferry and Moonachie.
Six of the seven remaining member towns – Kearny, North Arlington, East Rutherford, Rutherford, Ridgefield and Jersey City – receive money from the fund.
Teterboro, the other town in the NJMC district, neither pays nor receives.
The court-sanctioned formula was devised 38 years ago by the state Legislature as a way to address financial inequities resulting from some communities benefiting from tax revenues from tracts zoned for residential, commercial and industrial development versus other towns whose acreage may be zoned for open space and other nontaxable uses.
As the NJMC website puts it, “Simply stated, if a large section of Community A is zoned for a park, and a large section of Community B  is zoned for a major office, residential or warehouse project, then Community B should share some of the benefits derived from development.”
Here’s how the NJMC determines whether a community pays into the tax-sharing fund or receives money from it: “The first step . . .  calls for payment of county taxes by the municipality. What remains, minus the amount collected on ratable existing in 1970, is subject to the tax sharing plan.
“Each community then directly retains 60% of the revenues left after payment of county taxes and deduction of pre-1970 ratables.” Each community receives a credit for educating the students living in its portion of the Meadows district and receives a credit for its percentage of Meadows property.
“Communities whose total credits are larger than the amount subject to tax sharing receive payments from the tax sharing fund; communities whose total credits are less than the amount subject to tax sharing pay into the tax sharing fund.”
Among the towns that must pay into the fund, Secaucus is tops with $2,593,966; Carlstadt is next with $2,064,042; then North Bergen, $849,612; Lyndhurst, $642,091; Little Ferry, $525,913;  Moonachie, $415,962; and South Hackensack, $320,720.
Of the towns supposed to receive money, Kearny heads the list with $4,045,611. The rest are: Ridgefield, $1,208,561; Jersey City, $1,025,271; North Arlington, $908,006; East Rutherford, $120,220; and Rutherford, $104,637.
Lyndhurst Public Affairs Commissioner Brian Haggerty was among municipal officials from the paying towns attending a Secaucus press conference May 13 to announce their decision to hold back payments as a protest of what they characterize as a confusing and unfair formula.
Haggerty said the towns were “united in bringing this issue to the forefront to protect the interests of both the paying and receiving communities.”
“We’re not blaming the receiving communities,” Haggerty said.
But, given fiscal pressures all municipalities are dealing with, given the state-mandated 2% spending cap, the paying towns are calling for a reassessment of the formula, Haggerty said.
Lyndhurst took a big hit this past year, he said, when tax-exempt Bergen County Community College acquired a Meadows property that had been a big ratable. “Yet, we still have to pay our share into the (tax-sharing) fund,” he said.
Haggerty said the towns are looking to State Sen. Paul Sarlo, the Democratic deputy majority leader, for help in getting the state to subsidize the fund instead of the paying towns.
“I believe the governor is committed to finding a solution,” Haggerty said.
But Kearny Mayor Alberto Santos said it is only fair that his town should get payments from the fund to compensate it for the fact that much of Kearny’s Meadows property under NJMC control has become “environmentally degraded” from longtime landfill use.
“And that’s only partial compensation for what we lost in potential tax revenues over the years,” Santos said.
Without the approximately $4 million a year Kearny derives from the tax-sharing fund to help balance its budget, the average Kearny homeowner would have to fork over an additional $400 a year in real estate taxes, Santos said.
“There are bills proposed by Sen. Sarlo to look for other sources of funding – the general state budget, for example – and I would not oppose that,” Santos said.
But, Santos warned, “if the stalemate isn’t resolved and if the $4 million is undone, then the very premise of the NJMC – regional zoning of municipal property in the district to support rational development and open space – is threatened.”

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