RECOGNIZING THE FISCAL IMPACT OF THE CORONAVIRUS PANDEMIC ON THE TOWN OF SCOTCH PLAINS, NEW JERSEY; Congressional Record Vol. 166, No. 82
(Extensions of Remarks - May 01, 2020)
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[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
______
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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