Conford, Michels and Pressler. The opinion of the court was delivered by Conford, P.J.A.D.
This class action challenges the constitutionality of the New Jersey system of financing welfare and judiciary-administration functions through state-mandated costs imposed upon the counties, to be met through local realty taxes assessed therein. Plaintiffs assert that this system results in a denial of equal protection under the Federal and State Constitutions, a violation of the principle of uniformity of taxation contained in the State Constitution, and the negating of a so-called "implicit premise of local government."
Plaintiffs commenced the action in 1972 asserting that the present system of state-mandated costs upon counties to finance welfare and judiciary-administration functions results in substantially disproportionate fiscal burdens on counties in violation of the constitutional provisions mentioned. The demand was to have the statutes allocating such costs declared invalid, the municipalities and counties enjoined from levying and collecting local real property taxes for such purposes, and the defendants ordered to seek alternate sources of fiscal support for these functions.
In January 1973 the matter was certified by the Law Division as a class action. Of the original class plaintiffs (see Bonnet v. State , 141 N.J. Super. 177, 190 (Law Div. 1976)), only certain taxpayers, black residents and low-income families of Essex County, and the City of Newark (in its status as a property owner) were held to have standing, 141 N.J. Super. at 192-193, 197-208. The County of Essex and its constituent municipalities were held to be without
standing. Id. at 207. The League of Women Voters was permitted to intervene as party plaintiff. All of the original plaintiffs are appellants.
Defendant State of New Jersey, on behalf of all defendants, moved to dismiss on the ground that the complaint failed to state a claim upon which relief could be granted. The trial court denied the motion in March 1973. In April 1973 the Appellate Division granted the State's motion for leave to file an interlocutory appeal from that order. In January 1974 the Appellate Division affirmed the denial of the motion to dismiss, noting that Robinson v. Cahill , 62 N.J. 473 (1973), cert. den. sub nom. Dickey v. Robinson , 414 U.S. 976, 94 S. Ct. 292, 38 L. Ed. 2d 219 (1973), had not ruled out the possibility of the successful maintenance of an equal protection attack in this context. 126 N.J. Super. 239, 243-244. The Supreme Court subsequently denied the State's motion for leave to appeal from the decision of the Appellate Division.
The case was tried before Judge Dwyer in the Law Division. He held that the system of state-mandated costs at issue was violative of none of the constitutional precepts invoked by plaintiffs. Bonnet v. State, supra. Final judgment was entered in accordance with the written opinion on March 5, 1976, dismissing the complaint in all respects. All plaintiffs appealing, the Public Advocate and the Mercer County Mayors Advisory Committee were granted leave to file an amicus brief.
Plaintiff's initial complaint on this appeal is the dismissal of Essex County and its constituent municipalities (except Newark) as plaintiffs, for lack of standing. We need not review the correctness of that ruling, as we are satisfied that there is no constitutional infirmity in the statutory scheme attacked in this case no matter who are considered as properly complaining parties. For purposes of this opinion, we assume the county and all the municipalities are proper parties plaintiff.
The statutory and historical bases for the assignment of certain welfare and judiciary-administrative costs and expenses by the Legislature to the counties, to be met by local taxation, are amply set forth in the trial court opinion and need not be recounted here. 141 N.J. Super. at 230-248 (judiciary-administration); Id. at 250-266 (welfare).
With respect to the welfare cost aspect of plaintiffs' grievance, the costs currently allocated to the counties (in gross) are (1) 25% of the cost of benefits and all administrative costs under the state program denominated Aid to Families of the Working Poor (AFWP), N.J.S.A. 44:13-1 et seq.; (2) 12 1/2% of the cost of benefits and the unreimbursed administrative costs of the federally-assisted Aid to Families with Dependent Children program (AFDC), and (3) 25% of the residual costs of benefits paid under the Supplemental Security Income (SSI) program, together with the cost of state-mandated services to recipients of SSI assistance.
By far the largest of these welfare programs is AFDC, with aggregate benefits and administrative costs of about $450,000,000 annually, the counties' share being about $66,000,000 (some $51,000,000 for benefits and $15,000,000 for administration). The next largest program is SSI, with about $109,000,000 in benefits, $5,000,000 payable by the counties.
The counties' allocated proportion of the total state judiciary-administration expense is much larger than in the case of welfare. According to the Annual Report of the Administrative Director of the Courts for 1975-1976, out of a total cost of $75,352,550, $58,959,437, or about 78%, was allocated to the counties.
The gravamen of the theoretical bases for the constitutional attacks by plaintiffs on these cost allocation plans is that both welfare and the operation of the judiciary are state functions and therefore the responsibility of the State. Consequently, imposing them on the counties essentially on the basis, in the case of welfare, of where the welfare recipients
are residents and, as to the courts, on the basis of where the courts physically function, is arbitrary and fundamentally unfair.
Plaintiffs' prime statistical resort for their theme of fundamental unfairness is a pair of tables showing the ratio of welfare and judiciary-administration costs in all the counties to their respective aggregate equalized assessed valuations. For 1974 the latter item ranges in terms of each $1,000 of valuations, from a high of $2.07 in Essex down to $.47 in Hunterdon. The heavily urbanized counties, as distinguished from the suburban-rural ones have, by and large, the higher cost ratios. With respect to welfare, the ratios vary from a high of $2.97 in Essex down to a low of $.19 in Bergen. Again, the ratios for the more urbanized counties are higher. Neither of these tables is surprising. Welfare clients are predominantly resident in the larger cities. The largest ...