Legislative Update
 

6/28/2010 Passed by the Senate (40-0)
6/28/2010 Received in the Assembly, Referred to Assembly Housing and Local Government Committee

10/18/2010. A2679 and A3240 were amended to be companion legislation to S2068. These bills were voted out of the Housing and Local Government Committee 4-0-2. They are now waiting a vote by the full Assembly.

SENATE, No. 2068

STATE OF NEW JERSEY

214th LEGISLATURE

INTRODUCED JUNE 21, 2010

Sponsored by:

Senator NIA H. GILL

District 34 (Essex and Passaic)

Co-Sponsored by:

Senator Cunningham

SYNOPSIS

Provides dedicated line item on property tax bill to fund municipal free public libraries and joint free public libraries.

CURRENT VERSION OF TEXT

As introduced.

An Act concerning the raising of revenue for free public libraries and joint free public libraries and amending various sections of statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. R.S.40:54-8 is amended to read as follows:

40:54-8. [The governing body or appropriate board of] Within every municipality governed by this article there shall annually [appropriate and raise] be raised by taxation a sum equal to one-third of a mill on every dollar of assessable property within such municipality based on the equalized valuation of such property as certified by the Director of the Division of Taxation in the Department of the Treasury in accordance with the provisions of R.S.54:4-49. The amount shall be assessed, levied and collected in the same manner and at the same time as other municipal purposes taxes are assessed, levied and collected therein and shall be paid from the disbursing officer to the treasurer of the free public library at the times annual appropriations for other departments of the municipality are paid over.

Such additional sum, as in the judgment of [such] the municipal governing body or appropriate board of the municipality, is necessary for the proper maintenance of a free public library, may be appropriated and raised by taxation, annually.

(cf: P.L.1985, c.541, s.1)

2. Section 14 of P.L.1959, c.155 (C.40:54-29.16) is amended to read as follows:

14. The board of trustees of the joint library shall, not later than December 1 of each year, certify to the respective municipalities the sum required for the operation of the joint library for the ensuing year and the share of such sum to be borne by the taxpayers in each of the municipalities in accordance with the method of apportionment provided in the joint library agreement. If the governing body of any of the municipalities objects to the amount or apportionment so certified, it shall forthwith call a joint meeting of the governing bodies and the board of trustees for the purpose of adjusting and settling any differences. If the governing bodies of such municipalities cannot agree, the matter shall be referred to the Director of the Division of Local Government Services in the Department of Community Affairs for determination.

(cf: P.L.1959, c.155, s.14)

3. Section 15 of P.L.1959, c.155 (C.40:54-29.17) is amended to read as follows:

15. [Each municipality shall appropriate its] The proportionate share of the sum so certified or agreed upon or determined in its annual budget, shall [raise the same] be raised by taxation, pursuant to the provisions of R.S.54:4-49, and shall [pay] be paid over [said share] to the disbursing officer of the joint library at the times annual appropriations for other departments of the municipality are paid over. The amount thus agreed upon shall be assessed, levied, and collected in the same manner and at the same time as other municipal purposes taxes are assessed, levied and collected. Operations under the budget and related matters shall be subject to and in accordance with rules of the [local government board] Local Finance Board in the Department of Community Affairs.

(cf: P.L.1959, c.155, s.15)

4. R.S.54:4-49 is amended to read as follows:

54:4-49. (a) Except as to any State tax at a fixed rate provided for in sections 54:4-50 and 54:4-51 of this Title, each county board of taxation, after having received the tax lists and duplicates of the assessors and having revised and corrected the same and having equalized the aggregate valuations of all the real property in the respective taxing districts, as required by R.S.54:3-17 to 54:3-19, shall, after making adjustments for the debits and credits hereinafter mentioned, apportion the amount to be raised in the respective taxing districts for State, State school, county [and], free county library, free public library, and joint free public library purposes and for purposes of consolidated school districts and school districts comprising two or more taxing districts, on the basis of the total valuation so ascertained for each taxing district. The total valuation for each taxing district, so ascertained, shall be known as the “apportionment valuation.”

(b) The amount to be apportioned among the respective taxing districts shall be the amount to be raised for the purposes specified in subsection (a), plus or minus the difference between the total debits and total credits of the taxing districts affected, determined as provided in subsection (c). The net amounts respectively to be raised, after making allowance to the affected districts for the debits and credits, shall be equivalent to the amount required for each of the purposes specified in subsection (a).

(c) The net debit or credit of each taxing district shall be the amount by which the taxing district has overpaid or underpaid its share of the specific tax or taxes for the purposes specified in subsection (a) for the preceding year or years because of increases or decreases in the amount of the assessments of the district subsequent to the apportionment in the preceding year or years by reason of final judgments on appeals, complaints and applications, the correction of clerical errors under R.S.54:4-53 and the allowance of additional veterans' exemptions or deductions during the prior tax year by the collector pursuant to law. When an assessment has been reduced or added to, or increased, on appeal, complaint or other application, and the judgment on that appeal, complaint or other application has been further appealed, no deduction or increase as herein provided for shall be made with respect to the appealed assessment until the further appeal has been finally determined.

(d) So that there shall be uniformity of application and treatment under this section in all of the counties, the Director, Division of Taxation, shall issue regulations for the guidance of the county boards of taxation in the determination of the apportionment valuations, the amounts to be apportioned and the amounts of the debits and credits.

(cf: P.L.1975, c.212, s.38)

5. R.S.54:4-65 is amended to read as follows:

54:4-65. a. The Director of the Division of Local Government Services in the Department of Community Affairs shall approve the form and content of property tax bills.

b. (1) Each tax bill shall have printed thereon a brief tabulation showing the distribution of the amount raised by taxation in the taxing district, in such form as to disclose the rate per $100.00 of assessed valuation or the number of cents in each dollar paid by the taxpayer which is to be used for the payment of State school taxes, other State taxes, county taxes, local school expenditures, free public library taxes, and other local expenditures. The last named item may be further subdivided so as to show the amount for each of the several departments of the municipal government. In lieu of printing such information on the tax bill, any municipality may furnish the tabulation required hereunder and any other pertinent information in a statement accompanying the mailing or delivery of the tax bill.

(2) When a parcel receives a homestead property tax credit pursuant to the provisions of P.L.2007, c.62 (C.18A:7F-37 et al.), the amount of the credit shall be included with the tax calculation as a reduction in the total tax calculation for the year. One-half of the amount of the credit shall be deducted from taxes otherwise due for the third installment and the remaining one-half shall be deducted from taxes otherwise due for the fourth installment.

(3) There shall be included on or with the tax bill the delinquent interest rate or rates to be charged and any end of year penalty that is authorized and any other such information that the director may require from time to time.

c. The tax bill shall also include a calculation stating the amounts of State aid and assistance received by the municipality, school districts, special districts, free public libraries, and county governments that offset property taxes that are otherwise due on each parcel. The director shall certify to each tax collector the amounts of said State aid and assistance that shall serve as the basis for the calculation for each parcel. The director shall set standards for the calculation and display of the statement on the tax bill.

d. The tax bill or form mailed with the tax bill shall include thereon the date upon which each installment is due.

e. If a property tax bill includes in its calculation a homestead property tax credit, the bill shall, in addition to the calculation showing taxes due, either display a notice concerning the credit on the face of the property tax bill or with a separate notice, with the content and wording as the director provides.

(cf: P.L.2007, c.62, s.34)

6. This act shall take effect immediately.

STATEMENT

This bill would require municipalities in which a free public library is located or that belong to a joint municipal library to provide for a dedicated library purposes tax on the property tax bill. Under current law, property taxpayers in a municipality which belongs to a county library receive property tax bills which include a line item showing the amount the taxpayer is paying to support the county library. The bills would remove the appropriations for municipal libraries and joint municipal libraries from a municipality’s general fund and provide a dedicated line item on the property tax bill.
 

SINCE LIBRARIES ARE FUNDED BY TAX DOLLARS, WHAT DOES THE PUBLIC THINK ABOUT LIBRARY FUNDING?

In 2007, the New Jersey Library Association commissioned Potomac Incorporated to conduct a public opinion survey. The results revealed strong public support for library funding.

• 71% said that public libraries were an essential community service;
• 83% said public libraries were a good investment of tax dollars;
• 57% said more money should be spent locally on public library services.

Clearly, the residents of New Jersey value their investment in public library service.  See the detail survey results at http://www.njla.org/librariesmatter.pdf

WHY IS PUBLIC LIBRARY FUNDING DIFFERENT FROM OTHER LOCAL GOVERNMENT FUNDING?

Public libraries in New Jersey were established by a referendum of the voters. With the  referendum, libraries receive a dedicated amount of funding to operate each year.  Libraries are not mandated by state government but rather created by the people.

Because libraries are established by the voters their dedicated funding should not be included in the levy cap legislation.

HOW IS PUBLIC LIBRARY FUNDING DETERMINED?

Funding for public libraries is linked to property values. Since 1884, the dedicated portion of the municipal budget which must be reserved for library purposes has always been 1/3 of a mil. Therefore, wealthier communities with high property values will pay a higher per capita cost for their libraries but the required rate is the same for all communities.  

In addition, when a community receives new ratables such as a new shopping center or a new housing development, the library budget will increase to reflect this new growth.

ISN’T A 1/3 OF A MIL A TREMENDOUS AMOUNT OF MONEY?

A third of a mil equals 33 cents on a $1000 of assessed value. For example, a home which is assessed at $100,000 would pay $33 a year for library service. A home assessed at $200,000 would pay $66.

In practical terms, $33 is a less than a dollar a week for library service.

WHAT PERCENTAGE OF THE TAX BILL IS FOR LIBRARY SERVICE?

If you look at the entire tax bill for a property (local, school and county taxes) approximately 2% goes for library service.

If you look at just the municipal portion of the tax, the average amount for the public library is less than 5%. In only one community of New Jersey, Avalon, is library funding  over 10% of the local municipal library budget.

HASN’T LIBRARY FUNDING INCREASED DRAMATICALLY DURING THE PAST SEVERAL YEARS?

Library funding fluctuates based on property values. This is cyclical. The current statute permits library funding to increase when equalized valuations rise, compensating for the many years when library budgets would not receive any statutory increases. Municipal officials express concerns when library budgets increase during periods of economic growth. Unfortunately, property values do not always increase in New Jersey. In 2008 the equalized valuation for New Jersey increased just 2.2%, and 2009 it decreased by 1.7%. (Source: State of New Jersey, Department of Treasury http://www.state.nj.us/treasury/taxation/lpt/lptvalue.shtml)

The decrease in the equalized valuation has already effected library funding.   (2009 Minimum Funding Chart from the New Jersey State Library)  As the equalized valuation continues to change in the current economic contraction; municipal and joint library minimum funding will continue to be adjusted correspondingly.

DO ALL PUBLIC LIBRARIES RECEIVE DEDICATED FUNDING?

No, in NJ we have 48 association libraries. These libraries were not established by referendum and receive discretionary funding from the municipality. Unfortunately, most of these libraries are funded at a very low level and do not even meet state aid requirements.

DOESN’T STATE AID TO PUBLIC LIBRARIES PLAY A SIGNIFICANT ROLE IN LIBRARY FUNDING?

Every dollar for library funding is important. Unfortunately, direct state support for public libraries is $8.6 million, which is a $1 per capita per year. This has not increased in twenty years.  In the Propsed FY11 New Jersey Budget, state aid for New Jersey libraries is scheduled to be reduced by 50%.

THE CURRENT LAW PERMITS LIBRARY BOARDS OF TRUSTEES TO SET ASIDE FUNDING FOR FUTURE NEEDS.  DOESN’T THAT MEAN THAT TOO MUCH MONEY IS BEING SPENT ON LIBRARIES?

Under the current law, library boards can reserve funding for the future needs of the library. Isn’t that good fiscal planning? Just as in a personal budget, it is frequently necessary to plan for a needed capital item rather than borrow the money later. There are numerous examples where a library board has reserved dedicated funding to be used later for major improvements in the library such as a new computer system, new carpeting or furnishing. If the library hadn’t saved from its resources, the town would have had to bond for these items later. Isn’t it good fiscal policy to set aside funding for what you need rather than bond?

A state law approved in April 2008, allows for the state librarian to approve transfer of library funds if:

- The library’s reserve is equal to its budget for the previous year, plus an additional 25 percent, excluding money earmarked for capital expenses.

- The town gives the library money from its municipal budget, as required by state law.

- The library has money in its budget for operating expenses for the remainder of the year.

- The library board of trustees has a written plan for at least three years, showing the long-term funding needs of the library.

Source: New Jersey Revised Statutes: 40:54-15

ARE THERE OTHER PROGRAMS SUPPORTED THROUGH DEDICATED FUNDING WHICH ARE OUTSIDE THE LEVY CAP LEGISLATION?

Yes, for example, open space funding. Open space funding is also established by a referendum of the voters just like library funding. Currently, every county in New Jersey and more than 230 municipalities have a dedicated tax for open space preservation. Rates for open space funding vary but are often higher than the minimum dedicated amount for library funding. Funding for open space is a dedicated tax line exempt from the levy cap legislation and library funding should be as well.

Both open space and library funding can currently be set aside from year to year for future needs.

WHAT IS THE POSITION OF LOCAL GOVERNMENT ON EXEMPTING LIBRARIES FROM THE CAP LEVY LEGISLATION?

At its November 2007 Conference, the New Jersey League of Municipalities approved a resolution supporting removing municipal libraries from the cap levy legislation.

SO WHY AREN’T MUNICIPAL LIBRARIES EXEMPT FROM THE CAP LEVY LEGISLATION?

Good question, we don’t know.  The New Jersey Library Association has been trying for years to resolve this issue.  Maybe hearing from the public will help. 

S2068 would allow for the creation of the dedicated tax for public and joint libraries. S2068 has passed in the New Jersey Senate, 40-0.  The identical bill, A2679,  has been referred to the Assembly Housing and Local Government Committee.  Call and mail your assembly representative and ask them to support A2679.  S2068 is supported by the New Jersey League of Municipalities.  

September 2010