TRENTON — Legislation dating back nearly a decade that seeks to encourage shared-services agreements between local governments as a way to reduce spending and property taxes is set for Senate approval Thursday.

An earlier incarnation of the bill was passed by the Senate in 2012, then stalled in the Assembly. It hasn’t made it that far again since, despite being sponsored by Senate President Steve Sweeney, D-Gloucester.

“Identifying and implementing government efficiencies that will produce cost savings for taxpayers is more important than ever as we seek to recover from the economic hardships suffered by so many businesses and people as a result of the pandemic,” Sweeney said.

“Property taxes in New Jersey are the highest in the nation, and we all know why,” he said. “We are a high-income, densely populated, high cost-of-living state with an economy competing on jobs and salaries with New York City and Philadelphia. But adding to the complexity and difficulty is the fact that we have 565 municipalities, more than 600 school districts, 21 county governments and hundreds of authorities responsible for delivering government services. That’s why increasing shared services at the local level is so important and such a critical tool in controlling property taxes.”

The state’s average residential property tax bill last year rose 1.8% to $9,112, according to state Department of Community Affairs data. The overall tax levy, including special taxing districts, is almost $31.2 billion, an increase of $737 million from a year earlier.

The bill seeks to make it easier for shared-services agreements to go forward by addressing impediments caused by civil-service protections. A requirement that terminal leave payments be awarded to employees whose positions are eliminated through service mergers would be repealed.

The state would provide aid to offset local governments’ extra costs from implementing a shared service.

Local governments that don’t implement a shared-services agreement recommended by the state’s Local Unit Alignment, Reorganization and Consolidation Commission would lose state aid, equal to the amount of savings that LUARCC says would have been achieved. But the latest version of the bill puts many municipalities off-limits to being looked at by LUARCC without local permission.

“Although they’re encouraged to work with municipalities, they can’t act upon or intervene on any municipality that has any existing shared services in place,” said Sen. Paul Sarlo, D-Bergen. “So, if there’s a community that has an existing shared service in place, they can’t intervene without the approval of the local governing body.”

Business groups endorsed the bill, which Laura Gunn, director of government relations for the New Jersey Chamber of Commerce, noted was one of the recommendations of the Legislature’s Path to Progress working group in 2018.

“We support this,” Gunn said. “We want to make sure that government is run efficiently and we’re saving money and costs where we need to.”

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The New Jersey Business and Industry Association called the bill an effort to exercise much-needed fiscal discipline.

“We know it’s not a magical silver bullet that’s going to reduce government costs, but this committee, this Legislature, this state needs to do everything we possibly can to pursue structural reforms, any efficiency where we can find it,” said NJBIA vice president of government affairs Christopher Emigholz.

“They’re not easy, but we need to keep pushing,” he said. “So, bills like this, if there’s a chance that local governments might save some money and that might lead to property tax savings, and small businesses that are the ones getting killed by this pandemic are the ones that property taxes are often their biggest tax, and so anything we can do to move this along would be great.”

Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at michael.symons@townsquaremedia.com.

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