Assemblyman JOHN J. BURZICHELLI
District 3 (Cumberland, Gloucester and Salem)
Assemblyman RUBEN J. RAMOS, JR.
District 33 (Hudson)
Assemblywomen Riley, N.Munoz and Assemblyman Webber
Requires certain user fees for the provision of traditional municipal services to be included within the 2% municipal and county property tax levy cap.
CURRENT VERSION OF TEXT
An Act concerning the provision of services under the local 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 9 of P.L.2007, c.62 (C.40A:4-45.44) is amended to read as follows:
9. For the purposes of sections 9 through 13 of P.L.2007, c.62 (C.40A:4-45.44 through C.40A:4-45.47 and C.40A:4-45.3e):
"Adjusted tax levy" means an amount not greater than the sum of the amount to be raised by taxation of the previous fiscal year[, less any waivers from a prior fiscal year required to be deducted by the Local Finance Board pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46)] plus the amount of any user fees for traditional municipal services collected for a service, that result multiplied by 1.02, to which the sum of exclusions defined in subsection b. of section 10 of P.L.2007, c.62 (C.40A:4-45.45) shall be added.
"Amount to be raised by taxation" means the property tax levy set in the annual budget of a local unit.
"Local unit" means a municipality, county, fire district, or solid waste collection district, but shall not include a municipality that had a municipal purposes tax rate of $0.10 or less per $100 for the previous tax year.
"New ratables" means the product of the taxable value of any new construction or improvements times the tax rate of a local unit for its previous tax year.
“Traditional municipal services” means those basic services provided generally throughout the municipality without regard to a taxpayer's preference, and which have been traditionally funded through the municipal purposes property tax levy, including, but not limited to the clearing and lighting of roads and streets, the collection and disposal of solid waste, leaves, and recyclable materials along the roads and streets, general police patrol and response, and fire response.
“User fees for traditional municipal services” means amounts collected by a local unit for the provision of traditional municipal services that were previously funded through the local purposes property tax levy in the local budget year prior to the local budget year in which P.L. c. (pending before the Legislature as this bill) was enacted, but does not include amounts collected pursuant to a shared services or joint meeting agreement, regardless of its date of execution.
(cf: P.L.2010, c.44, s.8)
2. Section 10 of P.L.2007, c.62 (C.40A:4-45.45) is amended to read as follows:
10. a. (1) In the preparation of its budget the total of the amount to be raised by taxation and the amount to be raised by user fees for traditional municipal services by a local unit shall not exceed, except as provided in paragraph (2) of this subsection, the sum of new ratables[,] and 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).
(2) A local unit [that has not been granted approval for a waiver pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46),] may add to its adjusted tax levy in any one of the next three succeeding years, the amount of the difference between the maximum allowable amount to be raised by taxation or county purposes tax, as applicable, for the current local budget year pursuant to paragraph (1) of this subsection and the actual amount to be raised by taxation or county purposes tax, as applicable, for the current local budget year.
b. The following exclusions shall be added to the calculation of the adjusted tax levy:
increases in amounts required to be raised by taxation for capital expenditures, including debt service as defined by law; increases in pension contributions and accrued liability for pension contributions in excess of 2.0%; 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 2.0% 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; and extraordinary costs incurred by a local unit directly related to a declared emergency, as defined by regulation promulgated by the Commissioner [of the Department] of Community Affairs, in consultation with the Commissioner of Education, as appropriate.
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 this subsection or directly reduce the adjusted tax levy if there are no exclusions.
(cf: P.L.2010, c.44, s.9)
3. Section 11 of P.L.2007, c.62 (C.40A:4-45.46) is amended to read as follows:
11. a. (Deleted by amendment, P.L.2009, c.44)
b. (1) The governing body of a local unit may request approval, through a public question submitted to the legal voters residing in its territory to increase the amount to be raised by taxation by more than the allowable adjusted tax levy. Approval shall be by an affirmative vote of in excess of 50 percent of the people voting on the question at the election. The local unit budget proposing the increase shall be introduced and approved in the manner otherwise provided for budgets of that local unit at least 20 days prior to the date on which the referendum is to be held, and shall be published in the manner otherwise provided for budgets of the local unit at least 12 days prior to the referendum date, unless otherwise directed by the Director of the Division of Local Government Services in the Department of Community Affairs.
(2) The public question to be submitted to the voters at the referendum shall state only the amount by which the adjusted tax levy shall be increased by more than the otherwise allowable adjusted tax levy, and the percentage rate of increase which that amount represents over the allowable adjusted tax levy. The public question shall include an accompanying explanatory statement that identifies the changes in appropriations or revenues that warranted the governing body's decision to ask the public question; or, in the alternative and subject to the approval of the Director of the Division of Local Government Services in the Department of Community Affairs, a clear and concise narrative explanation of the circumstances for the increased adjusted tax levy being proposed.
(3) Unless otherwise provided pursuant to section 1 of P.L.1989, c.31 (C.40A:4-5.1), a referendum conducted pursuant to this subsection shall be held:
(a) for calendar year budgets only on the fourth Tuesday in January and the second Tuesday in March; and
(b) for fiscal year budgets, only the last Tuesday in September, or the second Tuesday in December.
(4) Any decision of the voters rejecting an increase to the tax levy cap under this subsection shall be final and conclusive, and no appeal or review shall be taken therefrom and no waiver application shall be made to the Local Finance Board.
(5) The director is authorized to act as necessary in order to consolidate ballot questions and procedures when a governing body elects to hold a referendum under both this section and section 9 of P.L.1983, c.49 (C.40A:4-45.16).
c. (Deleted by amendment, P.L.2010, c.44)
d. The adjusted tax levy shall be increased or decreased accordingly whenever the responsibility and associated cost of an activity performed by a local unit is transferred to or from a local unit, other government entity, or other service provider, or when a local unit shifts the funding for a traditional municipal service or activity which was included in the local budget for the local budget year prior to the local budget year in which P.L. c. (pending before the Legislature as this bill) was enacted, into or out from its local purposes property tax levy.
(cf: P.L.2011, c.134, s.60)
4. This act shall take effect immediately.
This bill is intended to help insulate local taxpayers from efforts by municipal officials to remove the cost of providing certain traditional municipal services from under the 2% municipal and county property tax levy cap by shifting to a “user fee” based funding system for traditional municipal services that were previously included the local budget prior to enactment of this bill. The provisions of this bill do not apply to amounts collected pursuant to a shared services or joint meeting agreement regardless of when the agreement is executed.
Currently, the expenditures for services that are removed from the local purposes property tax levy may still be “capped” by the cap on final appropriations under N.J.S.A.40A:4-45.1 et seq., but that cap is not as strict as the 2% local purposes property tax levy cap.
The bill also removes obsolete language regarding a tax cap waiver process that was previously obviated.