FISCAL NOTE TO


SENATE, No. 700


STATE OF NEW JERSEY

 

DATED: June 19, 1997

 

      Senate Bill No. 700 of 1996 amends the law governing in lieu of tax payments by the State to municipalities. The bill requires that the effective local purpose tax rate used to calculate the in lieu of tax payment by the State to a municipality be calculated by dividing the local municipal purposes tax levy, including all fire district budget expenditures for each municipality, by the net valuation on which county taxes are apportioned for each municipality.

      This amendment permits municipalities which have fire districts responsible for providing fire service to State institutions, including State prisons, to recoup the expense of providing the fire service to the State institutions.

      The Director of the Division of Taxation in the Department of the Treasury (Treasury) has advised the Office of Legislative Services (OLS) that the loss of State revenue under the bill will be a continuing one, but any administrative costs will be absorbed in the current operating budget. The Treasury also advises the OLS that, at present, there are 33 municipalities with fire districts that would qualify for in-lieu of payments. If the in-lieu of tax payments program is fully funded, there would be an increase of approximately $1.2 million in payments for these municipalities. Treasury also advises the OLS that the $1.2 million cost increase would necessitate an increased budget appropriation for the in-lieu of tax payment program.

      The OLS has no data which would indicate a fiscal impact different from that determined by the Treasury.

 

This fiscal note has been prepared pursuant to P.L.1980, c.67.