Legislation to create shared services programs to generate taxpayer savings passed the Senate Budget and Appropriations Committee. The bill would intend to create greater efficiencies by pooling resources.
The legislation, sponsored by Senate President Steve Sweeney (D-3) and State Sen. Vin Gopal (D-11), would encourage shared serviced agreements and joint contracts. Additionally, it would require a study from the Local Unit, Alignment, Reorganization and Consolidation Commission (LUARRC) focusing on where savings could be found.
“The new federal tax law will have a hard impact on the residents of New Jersey and their ability to deduct local taxes for community services. Shared services are a proven way to continue to provide the services important to our quality of life with reduced costs,” said Sweeney.
Provisions of the Bill
Under the bill, municipalities that do not approve a LUARCC recommendation for shared services would be subject to loss of state aid equal to LUARCC’s estimated cost savings for implementing the program.
In the case one town approves a LUARCC recommendation and a partner town denies it, only the town denying the recommendation would be subject to the loss of aid.
“We continue to look for ways to encourage shared agreements, and support our towns and counties who are thinking outside the box in order to enhance services for residents through the efficient use of tax dollars,” said Gopal.
Changes to Civil Service Rules
Local leaders argued Civil Service rules and tenure provisions often stood in the way of shared services agreements and joint contracts. The bill would address this in a number of ways.
Local units would not be required to provide employees terminated for reasons of economy and efficiency terminal leave payment, and the Civil Service Commission would not be required to review employment reconciliation plans.
Additional provisions would be relaxed by the Commission upon request by the parties to the agreement, and the provider local unit would be required to hire all employees in the pool until the pool is exhausted.
“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,” said Sweeney.