Phoning for dollars Official urges state to recoup unpaid taxes from Verizon

North Bergen Mayor and State Senator Nicholas Sacco is calling upon state officials to push the state to appropriate $40 million to local municipalities to offset a loss in unpaid property taxes once paid by telephone communications conglomerate Verizon.

If the action stands, Union City could lose $460,000, according to the estimated figures from the state Department of Community Affairs.

Last week, Sacco sent out a letter to the state’s legislative leaders, urging them to support his plea to have the state make up for the loss of property taxes that Verizon now escapes, due to a legal loophole it found.

A year ago, Verizon, known as Bell Atlantic at the time, found a way to depreciate the value of its property and its equipment throughout the state, therefore drastically reducing the tax rates.

“The entire value of their equipment reduced appreciably,” said North Bergen Township Administrator Joseph Auriemma. “It lessened the tax numbers and hurt us dramatically.”

Verizon was paying the taxes because of payphones, phone lines and other equipment installed in the town. “As a state senator, I will do my part in persuading my colleagues to appropriate the necessary funding,” said Sacco, who serves the New Jersey State Senate in the 31st Legislative District. “I believe that it’s important that tax payers be given the breaks they deserve.”

A year ago, Gov. Christie Whitman provided $33 million in the state budget that went to offset the losses that stemmed from the reassessed property values.

According to William Dressel, the executive director of the New Jersey League of Municipalities, no plan is currently in place to appropriate the lost $40 million in this year’s state fiscal budget. Dressel said that he has reached out to the governor’s office to come up with a legislative proposal, but has not received any word on his proposal.

“It became abundantly clear that many New Jersey property taxpayers are going to take it on the throat,” Dressel said.

If no state aid is allotted, municipalities will have to cut services or increase property taxes.

“Last year, the state picked up the bill, but there’s nothing in line for this year,” Auriemma said.

Jersey City stands to lose $1.4 million. Union City is next among the Hudson County municipalities with projected losses at $460,000, followed by North Bergen’s projected $202,000 loss estimate.

Two weeks ago, the state School Boards Association announced that 43 communities in the state would receive $7.85 million for their schools from the state to make up for the loss of tax revenue, but only one Hudson County town, East Newark, was among the beneficiaries.

Many towns will be hit

“No question, it could turn out to be a major hit to us,” Auriemma said. “Although it helps that Mayor Sacco can introduce legislation in the State Senate, he is still in the minority party [the Democrats]. The Republicans are in control and will determine whether they will appropriate the necessary funds.”

Every Hudson County municipality stands to lose some property taxes by the loophole tax ruling.

Although it remains to be seen whether Sacco’s letter or proposed legislation has any effect on a ruling from incoming Gov. Donald DiFrancesco, Auriemma feels optimistic that something positive will happen.

“I’m optimistic,” Auriemma said. “They gave us the money last year. I can’t see any reason why we wouldn’t get it again.”


© 2000, Newspaper Media Group