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TRENTON — Towns and counties would gain another exemption to the spending limits of the cap on property tax increases if a bill passed Thursday by the Assembly makes it into law.

Assemblyman Gary Schaer, D-Passaic, said he has heard from municipalities about having to pass on opportunities to use federal or private grants to hire police or buy fire trucks because of concerns over fitting the required local matching funds under the 2 percent cap.

The Assembly voted 48-26 to exempt matching-funds spending from the cap.

“We cannot hamstring local government from doing necessary things that members of one municipality or another would otherwise want to do but they have their hands tied and vital, vital considerations like police, like fire, like EMS, etc., are being jeopardized right now,” Schaer said.

Republicans opposed the bill.

“Any time we begin to erode away that 2 percent property tax cap level, that’s a problem for taxpayers. There’s no question about it,” said Assemblyman Anthony Bucco, R-Morris.

“We had a property tax cap years ago, but it had a million exemptions,” Bucco said. “We were able to negotiate a new property tax cap and limit the number of exceptions to very few, and I think you have to take very seriously any bill that begins to put exceptions back in.”

Even with the stricter cap in place, the average statewide property tax bill has grown by more than 2 percent annually to $8,549, the highest in the nation.

“Property taxes have not gone down. We’ve been able to control them with the new reforms that we put in and the 2 percent cap, but they haven’t gone down,” Bucco said. “So I’m a little concerned about a bill that would allow another exemption to the property tax cap.”

Public-safety unions and the New Jersey State League of Municipalities advocate for the change.

“We support it because it provides municipalities with flexibility,” said Lori Buckelew, legislative analyst for the League of Municipalities.

“You can have $100,000 grant, you may have a $10,000 match for it,” Buckelew said. “In order to raise that revenue, that match is within your 2 percent cap levy, and for your smaller municipalities, that may be your entire increase for the particular year or may exceed your increase.”

There are 30 municipalities in New Jersey with tax levies of $500,000 or less, meaning $10,000 would exceed the 2 percent increase allowed by the levy cap.

Buckelew and Schaer said the proposal allows towns an exception but doesn’t make them do it.

“Municipal officials obviously serve at the will of the people. And if the people don’t want that to happen, they’ll vote the guys out of office. And that’s fine, too,” Schaer said.

“It doesn’t open floodgates. In most cases, we’re talking relatively small amounts of money but critical amounts of money to get the job done,” he said.

The fate of the proposal is unclear. Similar legislation was passed by the Assembly in 2015 but then failed to advance in the Senate.

New Jersey: Decoded cuts through the cruft and gets to what matters in New Jersey news and politics. Follow on Facebook and Twitter.

Michael Symons is State House bureau chief for New Jersey 101.5 and the editor of New Jersey: Decoded. Follow @NJDecoded on Twitter and Facebook. Contact him at michael.symons@townsquaremedia.com

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