Assemblyman GARY S. SCHAER
District 36 (Bergen and Passaic)
Assemblywoman SHAVONDA E. SUMTER
District 35 (Bergen and Passaic)
Assemblyman BENJIE E. WIMBERLY
District 35 (Bergen and Passaic)
Assemblyman DANIEL R. BENSON
District 14 (Mercer and Middlesex)
Creates exclusion from municipal property tax levy cap for amounts necessary to provide required matching funds to qualify for grants and other funds.
CURRENT VERSION OF TEXT
An Act concerning exclusions from the 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. (1) In the preparation of its budget the amount to be raised by taxation by a local unit shall not exceed, except as provided in paragraph (2) of this subsection, 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).
(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:
(1) increases in amounts required to be raised by taxation for capital expenditures, including debt service as defined by law;
(2) increases in pension contributions and accrued liability for pension contributions in excess of 2.0%;
(3) 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]
(4) 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; and
(5) in the case of a municipality, amounts required by law, or by agreement, that are necessary to provide required matching funds in order for a municipality to receive federal, county, State, independent authority, or nonprofit, funds or grants. Notwithstanding the other provisions of this subsection, when the appropriation for all matching funds is less than the amount appropriated for all grants in the prior fiscal year, the amount of the difference shall be deducted from the sum of the exclusions listed in 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 this subsection or directly reduce the adjusted tax levy if there are no exclusions.
(cf: P.L.2010, c.44, s.9)
2. This act shall take effect immediately.
This bill would include as an exclusion to the property tax levy cap for municipalities, amounts required by law or by agreement that are necessary to provide matching funds required by law, or by agreement, in order for a municipality to receive federal, county, State, independent authority, or nonprofit, funds or grants. Currently, many municipalities are not able to apply for grants and other forms of financial assistance if matching funds are required, because the strict property tax levy cap does not contain room to allow them to raise matching funds. The purpose of this bill is to allow municipalities to raise these funds from property taxpayers by making them an exclusion from the property tax levy cap, since the benefit to the taxpayers from the extra money made available to the municipality outweighs the additional property tax burden from raising the required match.