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| DECEMBER 2009
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| Featured Articles |
EDITORIAL
Financing Solar Energy Projects
PRESIDENT'S CORNER
By William M. Homa, President
Government Finance Officers Association
It is an honor and privilege to be the next G F O A President.
I want to thank Alan for being a mentor to me during his tenure. I have learned so much from Alan over the years
and especially during his time as president. Alan talked about his journey with the GFOA last year. My journey started
around 1990 when Camille Furgiuele asked me to join the GFOA as a northern area board member. At that time, I chaired the education committee and we
held continuing education seminars in various locations throughout the state.
During my term as president, I would like to focus on education by scheduling continuing education seminars in various
locations throughout state. My interest in education began as a Rutgers instructor and I have been teaching throughout the
state for over 20 years. Many of you have been in my class at one time or another. Be it one of the accounting classes or the
review course for the state exam. I have all your grades from Rutgers, I known how well you did.
As I stated during my acceptance speech at the Fall Conference, for me it was about the Journey and not the destination. It is
about the service, the good work, and helping to make all of us the best professionals that we can be.
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Articles
of Interest in the 2009 DECEMBER Issue |
SHARED SERVICES WHITE PAPER
By Celeste Carpiano, Executive Director, New Jersey Association of Counties
According to the Tax Foundation, a nonpartisan group that ranks the states in terms of their respective tax burdens, seven of the
10 counties in the entire US in which property taxes are highest are in New Jersey. That’s seven of more than 3,000
counties.How did New Jersey gain this troublesome distinction?
Even among its neighbors in the Atlantic region, where incomes and the cost of living are comparatively high, New
Jersey’s property taxes are out of line. According to the Census, for example, the average property tax in New Jersey last year
was 28 percent higher than the average property tax in Connecticut. The difference was even greater between New Jersey and
New York, where the average property tax was 42 percent lower. In Pennsylvania – one of the top destinations for people moving
out of New Jersey – property taxes were, on average, 65 percent lower than they were in New Jersey last year. Finally,
in Delaware, property taxes there are a stunning 84 percent lower than they are in New Jersey.
According to the Tax Foundation, a nonpartisan group that ranks the states in terms of their respective tax burdens, seven of the 10 counties in the entire United States in
which property taxes are highest are in New Jersey. That’s seven of more than 3,000 counties. How did New Jersey gain this troublesome
distinction? Understanding New Jersey’s property tax system requires first an introduction to New Jersey’s political structure.
With 566 individual municipalities, 611 school districts, hundreds of autonomous authorities and 21 county governments,
New Jersey has more government per square mile than any other state. In fact, for every 4.96 square miles in New Jersey,
there’s some form of local government. All of those government entities – more than 1,400 – have the power to tax real estate.
New Jersey’s dense concentration oflocal governments has been the subject of criticism for many years. Policy makers have had little success convincing state residents
to give up their home rule, however. The fact is that since colonial times, New Jersey residents have been suspicious of
centralized power and distant authorities. They demand high levels of government services and they are jealously protective of
their local control.
County governments, for example, have been working with municipalities for many years on ways to combine resources and
save money. The results, while difficult to quantify precisely, have been nevertheless dramatic.
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DON'T BLAME THE MEMBERS – IT'S THE SYSTEM
“2010 Pension Bill Equals Double Digits”
By L. Mason Neely, CFO, East Brunswick
Each Board of Trustees for the various pension systems have approved the Annual Valuation Reports. Data contained therein will be utilized by the State
Division of Pensions for producing pension bills sent to all units of government for 2010. It will not be a surprise to anyone to
learn these bills will increase by double digit percentage factors. Each bill sent to the various governmental agencies for payment
in 2010 will be the results of three components.
The first component is the Normal Contribution Rate (NCR). This is the employer’s cost of providing benefits to employees based upon longevity tables and
system structure. Before the employer’s NCR is developed the members contribution is added into the system’s revenue. The
NCR cost to every employer for Public Employees Retirement System (PERS) local government will increase from 2009 to 2010 by 0.12%, going from 3.32% in 2009
to 3.44% in 2010. This, in and of itself, is not something which would break the back of the property tax payer.
The second component is the Accrued Unfunded Liabilities (AUL) which has resulted from prior years when State and Local Governments made no contributions
to the system even though employees continued to contribute. The AUL rate will go from 3.84% this year to 4.42% next year
which is an increase of a little over one half of one percent. The third component is the Non Contributory Group Life Insurance
mandated by the State which employers must provide. The insurance rate will go from 0.89% this year to 1.09% next year.
The net effect will be a rate change from 8.05% of salaries as a levy this year to 8.95% next year. One might contrast this
other than State rate with what the State must pay for their employee benefits. The State’s PERS rate next year will be 13.07%,
much high because of their lack of funding.
demonstrate the cost of providing normal pension benefits for Local Government employees is not outrageous. The outrage
is because State Legislators and Governors in the past determined to mandate a “holiday” which meant Local Governments were
not permitted to make pension payments. This gimmick of holding back on pension payments was called “property tax relief.”
At the same time the State cut State Aid because of said “tax relief.”
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GFOA OF NJ REPORT NEWSLETTER
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About
Report Newsletter
The Government Finance Officers Association of New Jersey publishes a quartely
newsletter "Report". It features articles pertinent to the Governmental Finance Community. For further information, you can contact: Editor, GFOANJ, PO Box 2018, Clifton, NJ 07015-2018
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| © GFOA of New Jersey
2010 All Rights Reserved |
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