May 1, 2020 - Issue: Vol. 166, No. 82 — Daily Edition116th Congress (2019 - 2020) - 2nd Session

[Extensions of Remarks]
[Pages E408-E409]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 RECOGNIZING THE FISCAL IMPACT OF THE CORONAVIRUS PANDEMIC ON THE TOWN 
                      OF SCOTCH PLAINS, NEW JERSEY

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                          HON. TOM MALINOWSKI

                             of new jersey

                    in the house of representatives

                          Friday, May 1, 2020

  Mr. MALINOWSKI. Madam Speaker, I rise today to recognize the 
devastating impact the

[[Page E409]]

coronavirus pandemic continues to have on the Town of Scotch Plains, 
New Jersey and many local governments throughout my district and the 
country. The coronavirus has decimated local revenues and increased 
costs and only Congress can provide a lifeline to small towns through 
direct and flexible funding.
  Scotch Plains is a 9 square mile town of about 24,000 people. It has 
a medium-sized downtown of about 200 small businesses with an 
additional 100 businesses spread throughout other commercial corridors 
of our town. The town is in the process of planning a revitalization of 
the downtown in conjunction with providing affordable housing. The town 
has a Aaa bond rating and the budget is lean.
  The coronavirus has hit Scotch Plains hard. As a result of the 
State's stay at home order, just about all the small businesses are 
closed, and the businesses that remain open for takeout/curbside pickup 
are barely surviving. Very few of the businesses received assistance 
from the first round of the CARES Act due to their small size and lack 
of credit history with banks. A Scotch Plains Business Resource Group 
comprised of volunteers and concerned citizens has been formed to 
assist the small businesses community navigate the various federal and 
state assistance programs. Attached is my four-point plan to assist 
those businesses that can remain open during the stay at home executive 
orders.
  Similarly, the town residents have been hit hard. Many of them have 
been furloughed from their jobs or forced to work at home at reduced 
hours. The closure of the schools has added additional difficulty for 
our residents to manage children as well as maintain employment. It is 
difficult to gage the percentage of residents who have been 
economically adversely affected, but it appears to be substantial.
  The township budget has been introduced on April 21, 2020 with a 
reduction in forecasted nonproperty tax revenue and a reduction in 
expense. However, the big unknown is the ability of our residents to 
continue to pay property taxes given the adverse effects of the corona 
virus on the economy.
  Under State law, the township must first fund the schools, counties 
and then the municipality. For 2020, the township has an obligation to 
fund the schools and the county at $69.5 million and $22.7 million, 
respectively. The municipal budget is $26 million.
  With a total obligation to raise $109 million in property taxes, a 5 
percent loss in the collection of these taxes would be almost $5.5 
million dollars with the responsibility of the municipality to pay the 
county and school taxes first. Therefore, the municipal budget would 
have a 21 percent deficit leading to a significant reduction of 
municipal services and municipal staff. A 10 percent loss in property 
tax revenue would lead to an $11 million loss or a 42 percent reduction 
in municipal funds, severely impacting the municipal government's 
ability to deliver essential town services.
  Given the current economic situations, estimates of 5 to 10 percent 
loss in property tax collection are probable. In addition, state aid of 
approximately $2 million is potentially being deferred from August to 
as late as December of 2020.
  The township's ability to secure short term bonds to cover these 
types of potential revenue shortfalls would be non-existent. Only the 
federal government has the capacity to help states and local 
governments of all sizes from falling off the above described budgetary 
cliff. Therefore, I strongly urge you to include in any future 
Coronavirus relief package my bill, H.R. 6467, which would provide $250 
billion in stabilization funds to localities with populations lower 
than 500,000.

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