This week, Mayor Angie Devanney joined mayors from the 7th Congressional District towns of Garwood, Westfield, Scotch Plains, Kenilworth, Springfield, Summit, Clinton and Raritan, in calling on the U.S. House and Senate leadership of both parties to provide for dedicated municipal funding in the next CARES package expected to come up for a vote in early May.
They urged support for including U.S. Rep Tom Malinowski’s bill, H.R. 6467, which would provide $250 billion in stabilization funds to localities with populations lower than 500,000, in any future CARES package. Under this Coronavirus Community Relief Act, state and local governments with a population under 500,000 would be eligible for support to cover expenses attributable to the COVID-19 epidemic, including lost revenue.
“Without targeted stabilization funding, our towns will be unable to continue providing critical services to our residents,” the letter states.
“The coronavirus pandemic has not only increased costs for local governments, but as a result of necessary, life-saving steps to contain the spread, it has also contributed to a precipitous decline in municipal revenue streams, including but not limited to: property taxes, court fees, parking fees, energy tax receipts, UCC fees, and hotel occupancy fees. The combination of lower revenues and higher expenses is compounded by New Jersey’s requirement that municipalities balance our budgets. As a result, small towns in New Jersey will be forced to slash essential services, including public schools, police and fire departments, furlough or layoff municipal employees, or raise taxes on already overburdened residents.”
The initial Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law by the President on March 27, created a $150 billion Coronavirus Relief Fund for state and local governments. Approximately $3.44 billion from this fund was allocated to the state of New Jersey, with part being provided as a direct block grant to the state and part to New Jersey counties with populations greater than 500,000 people.
Mayor Devanney also wrote her own letter to U.S. Senate and House leaders outlining specific consequences of a lack of funding for Berkeley Heights. The letter, to Reps. Nancy Pelosi, D-Calif, Kevin McCarthy, R-Calif., Sen. Mitch McConnell, R-Ky., and Sen. Chuck Schumer, D-N.Y., saying that it’s “crucial that smaller municipalities receive CARES 2 funds to help stabilize our local government and economies.”
She continued: “As we remain at home to spare the lives of our family, friends and neighbors, our local budget faces shortfalls from:
- The closure of our municipal court and resulting halt in fees it generates;
- Hotel occupancy tax revenue – which generally produces $250,000 in revenue directly to the municipality not shared with the Board of Education or County;
- Uniform Fire Prevention inspection decline due to social distancing rules;
- Little interest being earned on investment as a result of the Federal Reserve lowering interest rates to 0%;
- Anticipated lower-than-usual collection of current year taxes as a result of economic hardships experienced by our residents such as employment or loss of their small businesses;
- Cancellation of Spring and likely Summer recreation programs, halting fees into our Recreation Trust Fund, which pays for our recreation employees.
“Additionally, New Jersey municipalities have a legal obligation to pay the Board of Education and the county, even if our portion of taxes cannot be collected. This places a tremendous burden on small towns.
Here in Berkeley Heights, Mayor and Council have been working hard since March - when the pandemic hit locally - to cut any unnecessary expenditures from this year’s budget, anticipating decreased revenues and possibly more COVID-related expenses, while still maintaining satisfactory levels of resident services. The current draft budget has a 0% municipal tax increase per household. The budget is scheduled to be formally introduced at Council’s May 12th meeting.