Attempt to tie city spending to cost of living remains alive.
OCEAN CITY – Taxpayers who want to tie city spending to the federal cost of living have new hope.
The state Supreme Court this month remanded the proposal to the Appellate Court for further review.
The proposal called the Taxpayer Protection Initiative would tie city spending to the annual cost of living. If the city wanted more money in a given year, it would have to ask voters first. The same system would apply to union contracts and city debt.
A state Appellate Court last year rejected the proposal, saying the state Legislature never intended for municipal budgets to be subject to public referendums.
The court agreed with case law that determined that “such a scheme threatens to place municipal governments in a straitjacket and make it impossible for the city’s officers to carry out the public’s business.”
Superior Court Judge Joseph C. Visalli last October ruled in the city’s favor, saying the proposed measure would lead to financial chaos.
But the state Supreme Court sent the proposal back to the lower court after overturning another New Jersey budget case.
The federal cost of living adjustment for 2008 was 2.3 percent. By contrast, City Council approved a 10 percent tax hike this year.
“I don’t know that financial chaos is how I would describe it,” said Mayor Sal Perillo, who opposed the group’s plan.
“We have the state caps, which have turned out to be pretty effective restraints on municipal spending,” he said.
Perillo noted that the city has trimmed staff by 10 percent from 291 in 2004 to 263 full-time employees this year.
The city initiated the lawsuit by asking the court to rule on the legality of the issue.
Among the taxpayers pushing the initiative are James Tweed, Joseph Somerville, Dennis Myers, Fred Hoffman and Pete Guinosso. Their lawyer, Frank L. Corrado, said the Appellate Court still might rule against them.
“The real issue in the case is whether there are other statutes in New Jersey that pre-empt a municipality from enacting a budget-cap ordinance,” he said.
By Michael Miller, The Press of Atlantic City
(Published: Wednesday, May 28, 2008)