School Bill Averts Rise in County Tax

Camden Scrip - 1933

Camden Courier-Post – Feburary 16, 1938

Brunner Asks Support for A-122, Which Bars Interest on Scrip

ByA. CHARLES COROTIS

Camden City will save $83,239.35 in interest on state school taxes if Assembly Bill 122, awaiting action in the Legislature, becomes law.

In addition, passage of the measure would permit Camden county to increase its appropriation of surplus revenue to eliminate the present $56,631.28 boost in the amount to be raised by taxation and prevent a threatened 2.6 cents tax rate rise.

In a statement yesterday urging the county’s legislative delegation to support the bill Mayor Brunner, Camden director of revenue and finance, said another effect of its enactment would be to avert a judicial fight between the city and the State of New Jersey.

The bill, introduced by Assemblyman Farley, of Atlantic county last Wednesday, would amend the 1933 act permitting municipalities to pay 90 percent of their State school taxes in scrip and warrants, to obviate the necessity for paying interest on that 90 percent, even though the 10 percent retained by the State Department of Education was paid beyond the statutory deadline.

Farley Bill Vindicates McCord

Comptroller Sidney P. McCord, of Camden, has argued against payment of interest on the 90 percent from the start, and has steadfastly refused to honor bills totaling $8339.35, presented periodically by the county. Brunner lauded McCord for his refusal to pay. He said the comptroller’s action will represent a clear saving to the city if the Farley bill becomes law.

Meanwhile the county appropriated the sum in its 1937 budget under orders from State Auditor Waiter R. Darby, although Darby has railed since that counties need not budget interest on delinquent state taxes owed by municipalities.

The county never paid the money to the state because the city refused to pay the county, and Darby ordered it held in reserve pending settlement.

If A-122 is enacted the city automatically will be relieved and the reserve will be freed, available for general purposes once the Board of Freeholders acts to divert it back into the treasury.

Then enough of the $83,000 can be added to the tentative $400,000 appropriation of surplus revenue to hold the tax levy down to last year’s level, without disturbing the $850,000 surplus remaining.

Budget Meeting Tomorrow

The county budget is scheduled for introduction on first reading at a special freeholders’ meeting tonight. Present plans call for approval with the higher levy and subsequent amendment before public hearing and adoption, providing the bill is passed.

That the measure will become law was predicted by legislators and observers.

A vote was taken in the Republican majority caucus of the House yesterday, without a single dissenter. Farley sought immediate action to aid Atlantic City in preparation of its 1938 budget, but so much objection was voiced to consideration of bills on the day they were printed that the matter was held in abeyance.

The possibility exists that both houses may act next Monday under suspension of rules, considering the bill emergency legislation because of its effect on budgets.

According to the office of County Treasurer Edward J. Kelleher, Camden is the only municipality in the county affected by the measure.

All Interest Paid on 10 Percent

Camden, acting upon the advice of its comptroller, has refused to pay the claim. McCord insists the bill does not represent a legitimate obligation. He points out that of state school taxes paid by any district, only 10 percent goes to the state and the rest is apportioned among the municipalities of the county. Camden paid its 90 percent to the county with a warrant, on the basis of which the county issued its own warrants to the other municipalities, thereby making the funds available without imposing hardships on any districts.

All interest due on the 10 percent was paid, McCord pointed out. During a conference with Darby in Trenton last year McCord warned him that any attempt to compel inclusion of the appropriation in the budget would result in court action, and Mayor Brunner supported him.

Darby insisted the item would have to be budgeted, but a last-minute move by the Legislature deferred for a year certain drastic features of the new budget act and automatically permitted exclusion of the item.

Darby is expected to force the appropriation this year, however, and Camden is prepared to institute legal action. Passage of the Farley bill would clear the situation.

Scrip Practice Recalled

The bill’s statement of purpose explains the matter clearly. It follows:

“In 1933 the school scrip act was passed. The purpose was to allow municipalities which could not meet their state school tax in cash to do so in scrip. There was a provision that each municipality might pay to the county treasurer its school taxes in scrip except the 10 percent to be retained by the state.

“Under the old law the full 100 percent would be paid to the State Treasurer in cash, he would retain 10 percent for state school purposes and the balance of 90 percent would be distributed among the various school districts entitled to; it.

“Under the provisions of the 1933 act the scrip was sent directly to the county treasurer, who in turn would distribute it to the school districts on warrants of the county school superintendent and transmit directly to the state treasurer, the 10 percent due to the state.

“In some instances the county treasurer, because of the financial inability of certain municipalities to pay the state school taxes in full when due, was late in transmitting to the state treasurer the 10 percent due the state. Because of uncertainty of the law covering this situation, the state treasurer is now demanding of the counties which were late in transmitting the state’s 10 percent under the 1933 act and amendments thereof, interest on the full 100 percent and not on the 10 percent alone, even though the school districts making payment in scrip have delivered the school scrip in time, and also the receiving districts had received their school scrip in full and within time.

“There is no reason why the county treasurer, who is merely a disbursing agent, should be called upon to pay to the state any more than interest on the delinquency due the state, to wit on 10 percent of the state school tax, especially in view of the fact Section 3 of Chapter 156 of the Laws of 1933 provides that ‘the county shall be relieved of that part of its obligation to the state for 90 percent of the state school tax when the county treasurer shall have filed with the state treasurer receipts from the custodians of the several school districts.’”


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