Allows residents of certain Highlands municipalities to designate on gross income tax returns that a portion of gross income tax paid be returned to municipality of residence.
The bill is designed to alleviate financial pressures on municipalities that are over 95% situated within the Highlands preservation area. Specifically, it targets eight municipalities: Bloomsbury Borough, Byram Township, Califon Borough, Glen Gardner Borough, Kinnelon Borough, Lebanon Township, Ringwood Borough, and West Milford Township. These municipalities, facing challenges such as restricted development and declining property values due to preservation constraints, stand to benefit substantially from the designated funds aimed at reducing local property taxes.
Assembly Bill A2667 proposes to establish the 'NJ Highlands Tax Fairness Fund', enabling residents in designated Highlands municipalities to allocate a portion of their gross income tax to local municipalities. The bill specifies that eligible taxpayers may designate 10% of their gross income tax due, post any applicable credits for taxes paid to other jurisdictions, to be returned to their residing municipality. This mechanism aims to provide direct economic support to municipalities significantly impacted by preservation regulations that limit development and traditional revenue generation opportunities.
Key points of contention surrounding A2667 could revolve around the effectiveness and fairness of the income tax allocation method, particularly regarding whether it provides adequate relief to the affected municipalities compared to the burden of property tax levies. Additionally, stakeholders might debate the potential implications of financially incentivizing taxpayers to direct funds away from broader state financial obligations, potentially impacting overall economic equity within New Jersey. Concerns may also arise about the sustainability of the funding mechanism and whether it incentivizes long-term tax benefits for municipalities or merely serves as a temporary relief effort.