In his historic speech before the Joint Legislative Session on July 26, 2006, Governor Corzine analogized the New Jersey system of property taxes as haunted by its own “four horsemen of the apocalypse.”  He described those “horsemen” as “regressive property taxes; out of control spending; the amount of state debt; and multiple levels of government “delivering too many similar services.”

     The Governor then presented five areas of reform to help reduce property taxes. This article will briefly focus upon one of the areas of reform advocated by the Governor and others- shared services.

     This was not the first time this year a leader in Trenton has announced broad initiatives for consolidating local government services. On June 8, 2006 Assembly Speaker Joseph J. Roberts introduced two bills which will have significant impact on how municipal governments provide services to its constituents. The two bills were entitled “The Municipal Efficiency Promotion Aid Program’ (A-50) and “The Uniform Shared Services and Consolidation Act” (A-51).

     The legislation is being called the “CORE Reform Plan- “C” for clearing hurdles to shared services, “O” for overriding waste in schools, “R” for reining in pension abuses, and “E” for empowering citizens. Assembly Roberts, at the news conference stated that: “This plan is based on a simple tenet: We need to get rid of the avalanche of overlap, waste, and abuse that serves as an obstacle in the fight to hold down New Jersey’s property taxes.”

     While Governor Corzine’s speech was not as specific as the CORE Reform Plan, he did endorse the concept of providing government services on a regional basis. In addition, the Governor proposed creating a Reengineering Fund to implement the shared services plan. This plan would be implemented through a set of standards created by a financial control board.

     Assembly Robert’s plan also included financial incentives. A-50 appropriated funds for the Municipal Efficiency Promotion Block Grant Aid Program. Rules will be adopted by the Department of Community Affairs to measure the performance and cost savings relating to the shared services agreements.

     In order to appreciate the significance of the Governor’s speech on shared services and Assembly Robert’s proposed legislation, one needs to understand the history of the present law. Up until 1952, it was virtually impossible for municipalities to provide regional government services. In 1952 the Consolidate Municipal Service Act was enacted. This was followed by the Interlocal Services Act of 1973. They allowed municipalities to enter into joint agreements for a broad range of services.

     Despite the broad intentions of these Acts, the laws became difficult to manage for a variety of reasons. One major hurdle was the fact that New Jersey has 335 other laws which are sometimes confusing or inconsistent with the 1952 and 1973 Acts.

     A perfect example is the stringent requirements of the Civil Service System. Mandated by Article VII of the New Jersey State Constitution, it requires a designated system for hiring, promoting and separating classified employees. Currently, if a non-civil service municipality wants to enter into a shared service agreement with a municipality that operated under the civil service rules, the non- civil service community would need to switch to a civil service operation. This can easily become a major obstacle to securing a cost saving shared service agreement. In fact, two leading South Jersey municipalities are struggling with consolidating their police forces due to the Civil Service regulations.

     Governor Corzine addressed this issue in his July 26^th speech when he stated: “We should review our archaic, overly complex civil service laws that are often roadblocks to shared services agreements…”  A-51 attempts to solve this issue by requiring shared service agreements to include an “employment reconciliation plan” to be filed with the New Jersey Department of Personnel.

     This is but one example of the kinds of obstacles the New Jersey Legislature and the Governor will be facing when dealing with shared services agreements.

     While attempts have been in the past to consolidate local government services, there seems to be a growing consensus that the time is ripe for real change. Both political parties recognize the need for reducing property taxes; and shared services has been identified as one of the major areas of reform necessary to accomplish that goal.

     The New Jersey Conference of Mayors identified shared services way back in 1994 as one of its critical areas for reform. NJCM will continue to be working with the Legislature and the Governor’s office regarding all areas of reform, including shared services. Through my office and the NJCM Legislative Committee, we intend on pursing a just and reasonable solution to this complex problem.  

Andrew Weber, Esq., of Cooper Levenson, Attorneys at Law, has served NJCM as General Counsel since 1992. In addition, he was recently appointed as NJCM Legislative Co-Counsel.