Shamong, NJ feeling the cost of open space as state reimbursements drop

Things typically don’t change much in the small township of Shamong, N.J., nestled in southern Burlington County’s Pine Barrens. Local people like it that way, according to Mayor Kenneth Long.
 
But one big change has been going on in recent years, invisible to anyone who isn’t keeping an eye on state and municipal budgets. State government has drastically cut back on the money it’s historically paid the town as part of a “payment in lieu of taxes” — or PILOT — program.
 
New Jersey State League of Municipalities director Bill Dressel said Shamong is one of many New Jersey towns to get a cut in PILOT funding under the Christie administration.
 
While the cuts are legal, Dressel said, they have the effect of shifting the obligation to raise taxes from state lawmakers to local mayors and council members. “The town has to basically increase taxes or reduce services,” Dressel said.
 
Long said the state used to kick in about $500,000 a year to Shamong because Wharton State Forest extends into the town. The ostensible purpose of that money is to compensate the town for the cost of maintaining roads and putting out brush fires, as well as sacrificing land that might otherwise be developed with tax-generating businesses and residences.
 
In recent years, that amount has dropped to about $125,000, Long said. As a result, local government will probably have to raise the local purpose tax by about $20 to $40 a year per household.
 
Dressel said municipalities throughout New Jersey have a PILOT program of one kind or another with the state government. They may host state parks, administrative buildings or utilities equipment. For one reason or another, Trenton is kicking in money to compensate them for land that isn’t subject to local taxation.
 
Over the years, Dressel said, state lawmakers have taken to cutting back on that money. The process isn’t hard. Legally, the governor’s budget overrides any statutes laying out PILOT funding formulas.
 
But Dressel said the trend has increased in a big way since Christie took office. For example, towns used to directly collect fees from electric utilities for infrastructure that takes up taxable space. In the late 1980s, the law changed so that the state first collects that money, then redistributes it back to municipalities.
 
Dressel said these days, state government funnels off in excess of $300 million before sending that money back to municipalities. “It’s the local mayor and governing body that takes the heat,” Dressel said.
 
Meanwhile, state lawmakers and the governor can take credit for holding the line on state taxes.
“They’re not the ones who send out tax bills, but they’re the ones who make funding decisions that increase the financial burden on municipalities,” Dressel said.
 
In Shamong, Long isn’t expecting the tax increase to bankrupt anyone, or to send local residents after township officials with pitchforks and torches. Still, the past winter has taken a toll on local roads. And in light of the reduced PILOT money, local government will have to work extra hard to be frugal.
 
“They don’t want to be taxed out the wazoo,” he said of local residents. “They want to know what they’re getting for their money.”  
 
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This post is part of our South Jersey Politics Blog