Everyone acknowledges that property taxes in New Jersey are crushing. Senate President Stephen Sweeney (D-Gloucester), Assembly Speaker Sheila Oliver, (D-Essex) and Gov. Chris Christie have been vocal about the need to address the property tax crisis New Jersey has been battling for a generation. There are many reasons for the high tab we pay for local government services. And disagreements about public school funding, contracts, pensions, benefits and shared services are all but assured as each party makes its case.
Yet there is at least one cost-driver that's relatively uncontroversial but has been nearly absent from the debate: we need to get a handle on lawsuits against our local governments.
Unfortunately, lawsuits are part of municipal budgets' new normal in New Jersey. The Municipal Excess Liability Joint Fund, which is the largest insurer of local governments in New Jersey, reports that our towns' and cities' litigation costs have increased 104 percent over the past ten years. Most of this increase occurred in just the past five. Thats largely because trial lawyers -- like the ones you see on TV instructing you to call their 1-800 number if youve been hurt by "anything" -- have learned that local governments are an easy target.
Most towns have only a municipal attorney, not a large legal department of in-house lawyers, at their disposal. Legal work is frequently contracted out to more expensive private firms, particularly if its highly specialized. Needless to say, its expensive. You and your neighbors end up paying the cost of the settlement or claim and attorney's fees -- often for both parties. Plaintiffs' attorneys know from experience that sometimes its not financially worth it for a municipality to fight the more frivolous claims at all.
As a result of this new normal in the municipal realm, we now surrender over $350 million from our local budgets each year in liability costs. This is especially painful, because this comes directly from the pool of resources our local governments spend on educating our children, maintaining public safety and responding to emergencies. And personal injury claims account for $200 million of that total.