In the wake of Hurricane Sandy, many municipalities suffered extensive damage and will likely face financial difficulties in the future. This comes at a time right before a major federal budget cut is set to take place. New Jersey State League of Municipalities Executive Director Bill Dressel told NJ Today Managing Editor Mike Schneider that his organization is urging mayors to contact members of the federal government about the cuts. He also said that Hurricane Sandy may impact property taxes in some areas.
Dressel explained the upcoming federal cuts. “In August of 2011, Congress and the president reached an agreement on increasing the debt ceiling and as part of that, they set up a $1.2 trillion cut in the budget deficit which begins on Jan. 2 of 2013 where $109 billion is to be cut mostly in discretionary funding,” he said. “And so we’re urging the mayors throughout the state to contact the president and the members of Congress and urge them to make these cuts in a responsible fashion, to look at everything and not just discretionary funding and to maintain the tax exemption on municipal bonds.”
Hurricane Sandy, which caused devastation throughout New Jersey, is “the worst natural disaster in memory,” according to Dressel, who said mayors throughout the state have told him their residents and taxpayers are hurting and need assistance. He praised Gov. Chris Christie and President Barack Obama for coming together despite party differences to assist communities.
Dressel said the financial toll is great, calling it insurmountable, but he said the human element — dealing with people who lost their homes and everything in them — is even more so.
Christie has said tax increases are a possibility in some areas after Hurricane Sandy. Dressel said officials will have to look at all revenue sources and determine how much money will be returned through FEMA.
“I applaud the governor for holding up and giving the final bill to FEMA until all the costs can be calculated because they’re going to be insurmountable. But I think we have to look at all options. I think that this was a statewide emergency,” Dressel said. “New Jersey was ground zero for Hurricane Sandy so you could argue that we have a state responsibility to provide dollars but we also have to look too to the local property tax. In New Jersey, the only source of revenue we have to pay for the broad spectrum of programs and services and disasters is the property tax.”
Dressel said there might be other options besides raising taxes, but time will show where the state stands financially. “I think after this is settled, after we look at FEMA reimbursement, after we look at the property tax and how that is going to fare given the fact that some houses have been lost and ratable dollars will never be returned, I think we have to look at other options, including the state budget,” he said.