A55

An Act concerning increased public disclosure of certain local and school district budget information and amending and supplementing various parts of the statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. N.J.S.40A:4-10 is amended to read as follows:

40A:4-10. No budget or amendment thereof shall be adopted unless the director shall have previously certified his approval thereof. Final adoption shall be by resolution adopted by a majority of the full membership of the governing body, and may be by title where the procedures required by sections 40A:4-8 and 40A:4-9 or section 12 of P.L.1995, c.259 (C.40A:4-6.1), as applicable, have been followed.

The budget shall be adopted in the case of a county not later than February 25, and in the case of a municipality not later than March 20 of the calendar fiscal year or September 20 of the State fiscal year, except that the governing body may adopt the budget at any time within 10 days after the director shall have certified his approval thereof and returned the same, if such certification shall be later than the date of the advertised hearing.

If, in the case of a municipality which operates on the State fiscal year, the governing body fails to adopt the budget within the permitted time, the chief financial officer of the local unit shall so notify the director the next working day after the expiration of the permitted time.

[Three certified copies] Copies of the budget, as adopted, in such form and in such quantity as determined by the Local Finance Board, shall be transmitted to the director, and made available in print for public inspection at the local library, within three days after adoption.

Upon adoption, the budget shall constitute an appropriation for the purposes stated therein and an authorization of the amount to be raised by taxation for the purposes of the local unit.

The adopted budget shall be provided for public inspection on the local unit’s website, if one exists, and made available online and in print as required by this section in a “user-friendly” summary format using plain language. The Local Finance Board shall promulgate a “user-friendly,” plain language summary format for use by local units for this purpose pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

(cf: P.L.1995, c.259, s.11)

2. (New section) a. The Local Finance Board shall promulgate “user-friendly,” plain language budget summary forms for the use of counties, municipalities, local authorities, and fire districts. The board shall also promulgate a procedure for the submission by each of these local government units of the required budget summary form to the Division of Local Government Services in the Department of Community Affairs following the adoption of the annual budget.

b. The plain language budget summary shall provide the public with information in summary form about the budget of the local unit and shall include, in addition to an abbreviated version of the formal budget adopted by the local unit, such statistical information as the board determines to be useful for the public’s understanding of the local unit’s fiscal matters and condition, and shall also include, but shall not be limited to the following information, for both the local unit’s current budget year and the previous budget year, as the Local Finance Board determines appropriate to the local unit: all line items of appropriation aggregated by service type; the property tax rate; the property tax collection rate; the assessed value and taxable value of all real property located in the local unit; the amount of bonded indebtedness of the local unit; revenues by major category; description of unusual revenues or appropriations, with a description of the circumstances of the revenues or appropriations; a list of shared service agreements in which the local unit is participating; and the number and amount of outstanding long-term tax exemptions and abatements, and the amount of revenue derived therefrom.

c. The plain language budget summary shall be submitted to the Division of Local Government Services in such form as determined by the department, and, upon its receipt of the summary, the division shall make the summary available to the public through an Internet website maintained by the division. The information on the web site shall be presented as data that can be downloaded by the public for comparative purposes using commonly-used software.

3. (New section) Whenever the governing body of a local unit proposes an ordinance, resolution, or other action that will establish or modify the salaries, benefits, or other compensation of any individual employee or group of its employees not covered by a collective bargaining agreement, that measure shall only be taken after the local unit first holds a public meeting where the proposed action shall be introduced and discussed by the governing body. Notice of the date, time, place, and purpose of the public meeting, and of the time and place at which a copy of the proposed measure, together with the employee compensation disclosure form required to be prepared pursuant to this section, shall be available to each person requesting it, at no charge, during the week preceding such public meeting. The public meeting shall be advertised in a newspaper having substantial circulation in the local unit at least 10 days prior to the meeting date.

Prior to the publication of the newspaper notice required by this section, the chief financial officer or other appropriate officer of the local unit shall prepare an employee compensation disclosure form pursuant to the requirements of this section. The employee compensation disclosure form shall be made part of any formal action taken by the local unit.

The chief financial officer of the local unit shall file the employee compensation disclosure form with the clerk or the secretary to the governing body of the local unit prior to a public meeting when such measure shall be introduced and discussed. Any such proposed measure shall be announced publicly at the meeting, along with a declaration that an employee compensation disclosure form has been provided to the governing body of the local unit pursuant to the requirements of P.L. , c. (C. ) (pending before the Legislature as this bill). Any formal action by a governing body approving or disapproving a measure establishing or modifying the salaries, benefits, or other compensation of its employees shall occur no earlier than the tenth calendar day immediately following the meeting at which the measure was introduced and discussed.

The employee compensation disclosure form shall display the estimated cost of salary, benefits or other compensation, for each year of the contract for each individual employee or group of employees, itemized by the specific form of compensation, the estimated cost of the compensation at the time of the action, and the incremental difference between each year.

Governing body actions taken without compliance with this section shall be null and void.

4. (New section) Not later than the first day of the sixth month next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the Local Finance Board shall promulgate rules and regulations pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to implement the provisions of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) concerning the plain language budget summary, and in consultation with the Public Employee Relations Commission shall also promulgate the forms and procedures necessary to effectuate the provisions of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) concerning the employee compensation disclosure form.

5. (New section) a. The Commissioner of Education shall promulgate “user-friendly,” plain language budget summary forms for the use of school districts. The commissioner shall also promulgate a procedure for the submission by each school district of the required budget summary form to the Department of Education following the approval of the budget by the voters of the district or the board of school estimate, as applicable.

b. The plain language budget summary shall provide the public with information in summary form about the budget of the school district and shall include, in addition to an abbreviated version of the formal budget adopted by the school district, such statistical information as the commissioner determines to be useful for the public’s understanding of the school district’s fiscal matters and condition, and shall also include, but not be limited to, the following information for both the district’s budget year and the prebudget year: all line items of appropriation aggregated by item type; the school tax rate; the equalized school tax rate; revenues by major category; the amount of available surplus; a description of unusual revenues or appropriations, with a description of the circumstances of the revenues or appropriations; and a list of shared service agreements in which the district is participating.

c. The plain language budget summary shall be submitted to the Department of Education in such form as determined by the commissioner, and, upon its receipt of the summary, the department shall make the summary available to the public through an Internet website maintained by the department. The information on the web site shall be presented as data that can be downloaded by the public for comparative purposes using commonly-used software.

6. (New section) Whenever the board of education of a school district proposes a resolution or other action that will establish or modify the salaries, benefits, or other compensation of any individual employee or group of its employees not covered by a collective bargaining agreement, that measure shall only be taken after the board first holds a public meeting where the proposed action shall be introduced and discussed by the board. Notice of the date, time, place, and purpose of the public meeting, and of the time and place at which a copy of the proposed measure, together with the employee compensation disclosure form required to be prepared pursuant to this section, shall be available to each person requesting it, at no charge, during the week preceding the public meeting. The public meeting shall be advertised in a newspaper having substantial circulation in the district at least 10 days prior to the meeting date.

Prior to the publication of the newspaper notice required by this section, the school business administrator or other appropriate officer of the school district shall prepare an employee compensation disclosure form pursuant to the requirements of this section. The employee compensation disclosure form shall be made part of any formal action taken by the board.

The school business administrator of the district shall file the employee compensation disclosure form with the members of the board of education prior to a public meeting when the measure shall be introduced and discussed. Any such proposed measure shall be announced publicly at the meeting, along with a declaration that an employee compensation disclosure form has been provided to the board of education pursuant to the requirements of P.L. , c. (C. ) (pending before the Legislature as this bill). Any formal action by a board of education approving or disapproving a measure establishing or modifying the salaries, benefits, or other compensation of its employees shall occur no earlier than the tenth calendar day immediately following the meeting at which the measure was introduced and discussed.

Any action of a board of education taken without compliance with this section shall be null and void.

7. (New section) a. Not later than the first day of the sixth month next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the State Board of Education shall promulgate, in consultation with the Public Employee Relations Commission, rules and regulations pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to implement the provisions of section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) concerning the employee compensation disclosure form.

b. Not later than the first day of the sixth month next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the Commissioner of Education shall promulgate the “user friendly,” plain language budget summary forms and procedures required pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill)

8. (New section) In addition to other items prescribed by the Commissioner of Education pursuant to subsection c. of section 5 of P.L.1996, c.138 (C.18A:7F-5), the Commissioner of Education shall require a school district to submit annually with the budget the following items as supporting documentation in regard to the superintendent of schools, the assistant superintendent of schools, and the school business administrator:

a. a detailed statement of the employment contract terms for these school officials including, but not be limited to, the duration of the contract and all forms of compensation provided for under the contract;

b. the annualized cost of all benefits provided to these school officials including, but not limited to, all allowances, bonuses and stipends, and all contributions made by the school district towards the costs of health, dental, life and other types of insurance, medical and reimbursement plans, and retirement plans;

c. a detailed statement of any benefits provided for in the employment contract with these school officials which are to be conferred after or upon the official’s separation from the school district; and

d. a detailed statement of any form of in-kind or other form of remuneration provided to these school officials which is not otherwise included in the official’s salary or benefits.

9. (New section) A school business administrator, or any other person designated by the board of education, shall certify to the Commissioner of Education that all documentation prepared for income tax related purposes, in regard to superintendents of schools, assistant superintendents of schools, and school business administrators, complies fully with the requirements of federal and State laws and regulations regarding the types of compensation which are required to be reported.

10. (New section) The annual audit conducted pursuant to N.J.S.18A:23-1 shall include test measures to assure that documentation prepared for income tax related purposes complies fully with the requirements of federal and State laws and regulations regarding the compensation which is required to be reported.

11. N.J.S.18A:22-8 is amended to read as follows:

18A:22-8. The budget shall be prepared in such detail and upon such forms as shall be prescribed by the commissioner and to it shall be annexed a statement so itemized as to make the same readily understandable, in which shall be shown:

a. In tabular form there shall be set forth the following:

(1) The total expenditure for each item for the preceding school year, the amount appropriated for the current school year adjusted for transfers as of February 1 of the current school year, and the amount estimated to be necessary to be appropriated for the ensuing school year, indicated separately for each item as determined by the commissioner;

(2) The amount of the surplus account available at the beginning of the preceding school year, at the beginning of the current school year and the amount anticipated to be available for the ensuing school year;

(3) The amount of revenue available for budget purposes for the preceding school year, the amount available for the current school year as of February 1 of the current school year and the amount anticipated to be available for the ensuing school year in the following categories:

(a) Total to be raised by local property taxes

(b) Total State aid

(i) Core curriculum standards aid

(ii) Special education aid

(iii) Transportation aid

(iv) Early childhood program aid

(v) Demonstrably effective program aid

(vi) Instructional supplement aid

(vii) Supplemental core curriculum standards aid

(viii) Distance learning network aid

(ix) Bilingual aid

(x) Other (detailed at the discretion of the commissioner)

(i) Elementary and Secondary Education Act of 1965 (20 U.S.C. s.2701 et seq.)

(ii) Handicapped

(iii) Impact Aid

(iv) Vocational

(v) Other (detailed at the discretion of the commissioner)

(d) Other sources (detailed at the discretion of the commissioner).

b. (Deleted by amendment, P.L.1993, c.117).

c. In the event that the total expenditure for any item of appropriation is equal to $0.00 for: (1) the preceding school year, (2) the current school year, and (3) the amount estimated to be necessary to be appropriated for the ensuing school year, that item shall not be required to be published pursuant to N.J.S.18A:22-11.

d. The instruction function of the budget shall be divided at a minimum into elementary (K-5), middle school (6-8), and high school (9-12) cost centers, each of which shall be further divided by the core curriculum content areas. The commissioner shall phase in these requirements as soon as practicable.

e. The budget as adopted for the school year pursuant to section 5 of P.L.1996, c.138 (C.18A:7F-5) shall be provided for public inspection on the school district’s Internet site, if one exists, and made available in print in a “user-friendly” format using plain language. The Commissioner of Education shall promulgate a “user-friendly,” plain language budget summary format for the use of local districts for this purpose pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).

(cf: P.L.1996, c.138, s.53)

12. This act shall take effect immediately.

STATEMENT

The purpose of this bill is to make county, municipal and school district budget processes more “transparent.” The bill requires that, after its adoption by the governing body, a county or municipality’s budget must be provided for inspection on its official website, if one exists, and made available and online and in print in a “user-friendly” summary format using plain language. The Local Finance Board is directed by the bill to promulgate “user-friendly,” plain language budget summary forms for the use of counties, municipalities, fire districts and local authorities.

The plain language budget summary is to provide the public with information in summary form about the budget of the local unit. The summary must include, in addition to an abbreviated version of the formal budget adopted by the local unit, such statistical information as the Local Finance Board determines to be useful for the public’s understanding of the local unit’s fiscal matters and condition, and shall also include, but shall not be limited to the following information, for both the local unit’s current budget year and the previous budget year, as the Local Finance Board determines appropriate to the local unit: all line items of appropriation aggregated by service type; the property tax rate; the property tax collection rate; the assessed value and taxable value of all real property located in the local unit; the amount of bonded indebtedness of the local unit; revenues by major category; description of unusual revenues or appropriations, with a description of the circumstances of the revenues or appropriations; a list of shared service agreements in which the local unit is participating; and the number and amount of outstanding long-term tax exemptions and abatements, and the amount of revenue derived therefrom.

Each local unit must submit its plain language budget summary to the Division of Local Government Services in the Department of Community Affairs, and the division will make the summary available to the public through an Internet website maintained by the division. The bill requires that the information on the web site must be presented as data that can be downloaded by the public for comparative purposes using commonly-used software.

The bill also provides a mechanism for the public to be made aware of circumstances where the salaries, benefits and other compensation of a local unit’s employees are established or modified. The bill requires that whenever the governing body of a local unit proposes an ordinance, resolution, or other action establishing or modifying the salaries, benefits, or other compensation of any individual employee or group of its employees not covered by a collective bargaining agreement, that measure shall only be taken after the local unit first holds a public meeting where the proposed action shall be introduced and discussed by the governing body. Prior to the publication of the newspaper notice of the public meeting, the chief financial officer, or other appropriate officer, of the local unit must prepare an employee compensation disclosure form displaying the estimated cost of salary, benefits or other compensation, for each year of the contract for each individual employee or group of employees, itemized by the specific form of compensation, the estimated cost of the compensation at the time of the action, and the incremental difference between each year. The employee compensation disclosure form shall be made part of any formal action taken by the local unit, and shall be available to each person requesting it prior to the public meeting.

The chief financial officer of the local unit must file the employee compensation disclosure form with the clerk or the secretary to the governing body of the local unit prior to a public meeting when such measure shall be discussed. Any formal action by a governing body approving or disapproving a measure establishing or modifying the salaries, benefits, or other compensation of its employees shall occur no earlier than the tenth calendar day immediately following the meeting at which the measure was introduced and discussed.

The bill provides that governing body actions taken without compliance with these requirements will be null and void.

The bill establishes similar requirements for school district budget and budget-related information. The plain language budget summary for school district is to provide the public with information in summary form about the budget of the district. The summary must include an abbreviated version of the formal budget adopted by the school board, statistical information, and for the district’s current budget year and the previous budget year: all line items of appropriation aggregated by item type; the school tax rate; the equalized school tax rate; revenues by major category; the amount of available surplus; description of unusual revenues or appropriations, with a description of the circumstances of the revenues or appropriations; and a list of shared service agreements in which the district is participating. Each district is to submit its plain language budget summary to the Department of Education, which will be required to make the summary available to the public through an Internet website.

As is required of local unit governing bodies under the bill, a school district would be required to provide a mechanism for public notice and awareness prior to establishing or modifying the salaries, benefits, or other compensation of employees not covered by a collective bargaining agreement.

The bill also requires boards of education to submit to the Commissioner of Education along with their annual budgets certain supporting documentation concerning superintendents of schools, assistant superintendents of schools, and school business administrators. This supporting documentation will include:

· a detailed statement of the employment contract terms for these school officials, including the duration of the contract and all forms of compensation;

· the annualized cost of all benefits provided to these school district officials, including all allowances, bonuses and stipends, and all contributions made by the district towards the costs of insurance, medical and reimbursement plans, and retirement plans;

· a detailed statement of any benefits which are to be conferred after or upon the official’s separation from the district; and

· a detailed statement of any form of in-kind or other form of remuneration provided which is not otherwise included in the official’s salary or benefits.

The bill further provides that the school business administrator, or another person designated by the school board, must certify that all documentation prepared for income tax related purposes in regard to these school district officials complies with federal and State requirements regarding the types of compensation which are required to be reported. Also, the annual audit that is conducted in each district will be required to include test measures to assure that this documentation complies with the federal and State requirements.