Sponsored by:
Assemblyman DANIEL R. BENSON
District 14 (Mercer and Middlesex)
Assemblyman RONALD S. DANCER
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
Requires Division of Local Government Services to approve local unit budgets with excess anticipated miscellaneous revenue due to COVID-19 and authorizes school districts to maintain surplus at four percent for 2020-2021 school year.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the anticipation of miscellaneous revenue in local unit budgets and the level of allowable school district surplus following the COVID-19 pandemic.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding the provisions of N.J.S.40A:4-26 or any other section of law to the contrary, due to the financial impacts of COVID-19, miscellaneous revenues from any source may be included as an anticipated revenue in the calendar year 2021 or fiscal year 2021 budget of a local unit, as applicable, in an amount in excess of the amount actually realized in cash from the same source during the next preceding fiscal year. The governing body of a local unit shall submit an application to the Division of Local Government Services in the Department of Community Affairs demonstrating that the financial impact of COVID-19 clearly warrants the expectation that the excess amount will actually be realized in cash during calendar year 2021 or fiscal year 2021, as applicable. If the division determines that the anticipated excess revenue is attributed to the financial impact of COVID-19, and the amount of anticipated revenue complies with the guidelines established pursuant to subsection b. of this section, the division shall approve the local unit’s application and shall certify the determination, in writing, to the local unit.
b. Within 30 days after the date of enactment of this act, the division shall issue guidelines as are necessary to implement the provisions of this act. At a minimum, these guidelines shall determine for local units the amount of any miscellaneous revenue that may be anticipated in the calendar year 2021 or fiscal year 2021 budget of a local unit, as applicable.
2. Notwithstanding the provisions of section 7 of P.L.1996, c.138 (C.18A:7F-7), section 2 of P.L.1979, c.294 (C.18A:22-8.1), or any other section of law to the contrary, due to the financial impacts of COVID-19, a school district, other than a county vocational school district, may maintain for the 2020-2021 school year, an undesignated general fund balance of four percent of the budgeted general fund for the prebudget year, and the use or transfer of those funds between line items and program categories shall not require the approval of the Commissioner of Education.
3. This act shall take
effect immediately and section 1 shall expire one year after enactment.
STATEMENT
Due to the financial impacts of COVID-19, miscellaneous revenues from any source may be included as an anticipated revenue in a local unit budget in an amount in excess of the amount actually realized in cash from the same source during the next preceding fiscal year. The governing body of a local unit would submit an application to the Division of Local Government Services in the Department of Community Affairs demonstrating that the financial impact of COVID-19 clearly warrants the expectation that such excess amount will actually be realized in cash during calendar year 2021 or fiscal year 2021, as applicable.
If the division determines the anticipated excess revenue to be attributed to the financial impact of COVID-19, and the anticipated revenue projections are in accordance with the guidelines to be established by the division, the division must approve the local unit’s application and must certify such determination, in writing, to the local unit.
The bill also provides that for the 2020-2021 school year, a school district may maintain a surplus of four percent. Under current law a school district, other than a county vocational school district, may only maintain a surplus of two percent. The bill also provides that for the 2020-2021 school year, the transfer of surplus funds between line items and program categories will not require the approval of the Commissioner of Education.