BRIDGEWATER, NJ - Bridgewater Township Mayor Matthew Moench sent a letter to Gov. Phil Murphy and legislative leadership Monday to ask them to take on some municipal finance reforms to help towns like Bridgewater in dealing with budgetary issues that could arise as a result of COVID-19.
"The difficulties facing New Jersey's municipalities will not discriminate based on population size or geography, and, in many instances, it will be towns like ours that receive a significant portion of income from commercial sectors that will feel impacts the greatest," he said in the letter. "We are facing an estimated loss of revenue of $1.8 million directly related to COVID-19 outbreak. In addition, we have at least another $250,000 of expenses directly related to this pandemic."
If the costs were them passed on to taxpayers, Moench said in the letter, they would be looking at a tax increase of more than 10 percent.
"This is unacceptable for our residents already struggling related to this crisis," he said in the letter.
Moench proposed a number of reforms on behalf of Bridgewater residents.
The first is to authorize municipalities to issue a special emergency for COVID-19 expenses and raise the funds over five budget years. The statue, he said, is limited as to what kinds of emergencies can be issued by municipalities, and they must usually be raised in the following budget year.
"We are asking for relief through legislative or administrative action for DCA to authorize CORONA-related expenses that are issued as emergencies to be raised over five years," Moench said.
Moench said he would also like to see a mechanism created for municipalities to address the loss of revenue over five years. Most operating expenses, he said, cannot be paid with debt, but municipalities should have an ability to issue debt, preferably with no down payment, to provide funding for lost revenue and allow the town to raise one-fifth of it every year for five years, outside the tax levy cap.
Finally, Moench said, school districts and counties should share in costs of borrowing if the tax income is delayed or reduced.
"If tax revenue collections are low or delayed and a municipality has to borrow money in order to provide payments to the county and board of education, the burden for paying interest on tax anticipation notes should be shared by the county and the board of education," he said.
Moench said in his letter that he would look for the legislation to act quickly to allow municipalities extra tools to address budgets this year.
"Enacting these reforms will also take the burden off the state by providing municipalities more ability to manage their budget on their own without relying on additional state aid that may never come," he said.