Tuesday, August 16, 2022

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Extraordinary Aid for New Jersey’s Extraordinary Times

When New Jersey municipal governments cannot balance their budgets and must resort to dramatic property tax hikes or service cuts, they can apply to Trenton for “extraordinary aid,” one of several aid streams the state doles out to its 566 municipal governments, school districts, and county governments.

According to the Division of Local Government Services, “Extraordinary Aid is awarded to municipalities who, because of extreme circumstances, would not be able to provide essential services to the community without a substantial increase in their property tax rate.”

To get aid, the municipality must apply and show their fiscal status, including documenting efforts to contain costs and share services. In other words, in theory, Extraordinary Aid is for Extraordinary Circumstances. However, some municipalities seem to have been in fiscal distress since 2001.

This year the state will distribute $10.7 million to 39 municipalities. The largest amount, $850,000, goes to Bound Brook in Somerset County. Taking a look at the past seven years of Extraordinary Aid awards reveals 27 of the communities on this year’s list have received it before. In fact, nine communities have gotten it every year since 2001, including Bound Brook Borough — which may indeed have extraordinary needs. Prone to disastrous floods since its founding, a levee is scheduled to be completed by 2012.

Yet the persistent award of aid for out-of-the-ordinary financial crises implies that these communities have come to rely on quick fixes as permanent solutions to their budget problems.

While some communities on the list may seem like natural cases for aid, the question that needs to be asked is: When does extraordinary aid make financial crisis a permanent state of affairs?