The Town Crier - Legislative Backgrounder

The Town Crier - Legislative Backgrounder

Sep 28

[ARCHIVED] Federal Budget Update: Shutdown Countdown

The original item was published from September 28, 2023 1:23 PM to September 28, 2023 2:21 PM

If Congress is unable to send a short-term Continuing Resolution to President Biden this week, spending authority for most federal agencies will expire on Saturday and the federal government will be shut down.

The House and Senate remain on very different paths to the end of the current fiscal year, which ends on September 30. If Congress is unable to send a short-term Continuing Resolution to President Biden this week, spending authority for most federal agencies will expire on Saturday and the federal government will be "shut down."

The Senate is using this week to assemble and pass a short-term, bipartisan Continuing Resolution that is likely to exclude any policy provisions that don’t already have broad bipartisan support among Senators. On the other hand, the House is using this week to try to advance a handful of year-long spending bills with Republican support alone. At this late point, without a dramatic change in direction, a shutdown appears inevitable.

The Senate proposed Continuing Resolution would keep the federal government operating for another six weeks, giving Congress until early November to continue working on Fiscal Year 2024 appropriations. It could also include a small amount of new funding for disaster relief and aid for Ukraine. However, such funding would be far below the amounts sought by the Administration, essentially punting the debate over funding for disaster and international aid to later this year.

In the House, Speaker McCarthy has scheduled consideration of four FY24 spending bills. Last week, several Republicans stopped consideration of any spending bills by voting against the rule, and it's unclear if those holdouts will allow the new rule to pass later tonight. If the new rule does pass the House, it will be because House appropriators have made multiple new concessions to Members of Congress. They are demanding even steeper spending cuts than those negotiated by Speaker McCarthy and President Biden earlier this year.

NFIP & FAA Reauthorization Deadlines

Other must-pass bills, including reauthorization of the National Flood Insurance Program (NFIP) and the Federal Aviation Administration (FAA), also face uncertain prospects. Lawmakers are trying to build support for a separate short-term extension for the National Flood Insurance Program to prevent housing market disruptions. The urgency arises because the NFIP’s last 25 short-term authorization deadlines have historically coincided with government funding deadlines, potentially causing a lapse in NFIP authorization if government funding isn’t secured. Although there’s bipartisan support to separate NFIP from government funding, the timing of legislative action and the willingness to separate NFIP from the budget negotiations in the House and Senate remains uncertain.

State Property Tax Grace Period During Extended Shutdown 

During an extended federal government shutdown of 21 days or greater, P.L. 2019, c. 491 authorizes municipalities to adopt an extended property tax grace period applicable to a property taxpayer or the taxpayer's spouse/civil union partner/domestic partner who is either:

  • An employee of a federal government agency who is furloughed because of a shutdown, and 1) receives unemployment benefits during the shutdown, or 2) who works during a shutdown but is not paid because of the shutdown; or
  • A contractor whose pay is received through a contract with a federal government agency but whose payment is delayed or diminished because of a shutdown provided that the contractor receives unemployment benefits during the shutdown.

A municipality may adopt a resolution extending the grace period for the above-referenced qualifying individuals on or before the date upon which the next property tax installment payment is payable. For example, for the November 1 property tax installment, the grace period would extend to February 1.

Further, this grace period only applies if the shutdown either remains in effect as of the property tax installment due date; or concludes less than 14 days prior to the property tax installment due date. This provision only applies to property taxes and not to local assessments or other municipal charges.

Once the governing body adopts a resolution allowing qualifying taxpayers to receive an extended grace period due to a federal shutdown, the municipal clerk needs to forward the resolution to the Division at dlgs@dca.nj.gov (with the subject heading “Property Tax Grace Period Federal Shutdown”) no later than the third business day next following adoption. If the municipality is under State Supervision or is receiving Transitional Aid, the Division Director must approve the resolution before it can become effective. More information is available on pages 8 and 9 of Local Finance Notice 2020-25.

Additional Resources

The following federal government shutdown resources are available for your review: 

We encourage you to share this information with your municipal professionals.

League Contact(s): Paul Penna, Senior Legislative Analyst, ppena@njlm.org