A3977

An Act concerning the local property tax levy cap and amending P.L.2007, c.62.

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

1. Section 10 of P.L.2007, c.62 (C.40A:4-45.45) is amended to read as follows:

10. a. In the preparation of its budget the amount to be raised by taxation by a local unit shall not exceed the sum of new ratables, the adjusted tax levy, and the total of waivers approved pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46); provided, however, that in the case of a county, the amount to be raised by taxation shall not exceed the amount permitted by section 4 of P.L.1976, c.68 (C.40A:4-45.4).

b. The following exclusions shall be added to the calculation of the adjusted tax levy:

(1) increases in amounts required to be raised for (a) all debt service and (b) lease payments with county improvement authorities pursuant to leases in effect on the effective date of P.L.2007, c.62 (C.18A:7F-37 et al.);

(2) increases in amounts required to be raised to replace State formula aid due to a reduction in State formula aid from the previous local budget year;

(3) increases in amounts for certain pension contributions set forth in section 5 of P.L.2003, c.108 (C.40A:4-45.43) for the years set forth in that section;

(4) with respect to municipalities, any increase, greater than four percent, in the reserve for uncollected taxes that is required by law;

(5) increases in health care costs equal to that portion of the actual increase in total health care costs for the budget year that is in excess of four percent of the total health care costs in the prior year, but is not in excess of the product of the total health care costs in the prior year and the average percentage increase of the State Health Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), as annually determined by the Division of Pensions and Benefits in the Department of the Treasury;

(6) increases in amounts for certain normal and accrued liability pension contributions set forth in sections 1 and 2 of P.L.2009, c.19 amending section 24 of P.L.1954, c.84 (C.43:15A-24) and section 15 of P.L.1944, c.255 (C.43:16A-15) equal to that portion of the actual increase in normal and accrued liability pension contributions for the budget year that is in excess of four percent of the normal and accrued liability pension contributions in the prior year;

(7) increases in amounts required to be raised to replace federal aid received under the COPS Hiring Recovery Program, due to a reduction in, or elimination of, federal aid under that program from the aid received during the previous local budget year.

Notwithstanding the other provisions of this subsection, when the appropriation for all debt service is less than the amount appropriated for all debt service in the prior fiscal year, the amount of the difference shall be deducted from the sum of the exclusions listed in paragraphs (1) through [(6)] (7) of this subsection. If there are no exclusions, then the amount of the difference shall reduce the adjusted tax levy by that amount. Any cancelled or unexpended appropriation for any exclusion pursuant to this subsection or waiver pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46), also shall be deducted from the sum of the exclusions listed in paragraphs (1) through [(6)] (7) or directly reduce the adjusted tax levy if there are no exclusions.

(cf: P.L.2009, c.19, s.4)

2. This act shall take effect immediately.

STATEMENT

The bill is intended to permit municipalities and counties to take full advantage of their window of opportunity to utilize 100% federal funding from the American Recovery and Reinvestment Act (ARRA) of 2009, as supplemented by the Omnibus Appropriations Act of 2009, to hire or re-hire police officers for a three-year period under the COPS Hiring Recovery Program (CHRP). The federal ARRA stimulus funds allow municipalities to hire new officer or re-hire officers laid-off due to decreases in State aid to municipalities in the last several fiscal years. In the fourth year following receipt of the federal CHRP aid, the financial responsibility to pay for the employment of the new or re-hired officers will shift to the municipalities. At that time it will be extremely difficult for municipalities and counties to pick up that financial responsibility and remain under the 4% property tax levy cap, and the consequential loss of these police officers, after the three-year federal funding period, could endanger public safety.