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'Levy Cap'

Mar 25

Budget Deadline Extended, Levy Cap Exemption & Estimated Tax Bills

Posted to The Town Crier - Legislative Backgrounder on March 25, 2020 at 1:33 PM by Legislative Staff

In response to COVID-19, the Division of Local Government Services (DLGS) issued Local Finance Notice 2020-07  (LFN) providing emergency budget, levy cap exemption, tax bill and depositing funds guidance.  Portions of the LFN are highlighted below.   


Budget Deadlines

Budget Introduction Deadline extended from March 29, 2020, to April 28, 2020, or the next regularly scheduled meeting after April 28, 2020.

Budget Adoption Deadline extended from April 30, 2020, to May 30, 2020, or the next regularly scheduled meeting after May 30, 2020.

Public Inspections of Budgets

To meet the statutory requirement for public inspection of the budget prior to the public hearing, the local unit must post the introduced budget on their website no later than the date of the public notice. The budget advertisement must include the web address where the public can access the introduced budget. Municipalities without websites can email their introduced budgets to the Division at dlgs@dca.nj.gov for posting on the Division’s website. Please see the complete LFN for additional submission requirements. 

Public Hearing Requirements

For budget hearings held by electronic meeting, the local unit must facilitate public comment during the public hearing. The budget advertisement must include information on how the public can remotely access the governing body meeting and provide comment during the meeting.

In addition to the public notice in the newspaper, the Division is strongly recommending that local units post their budget advertisement on their website and notify residents of the public hearing through other electronic means, for example, email distribution list or automated phone or text message.  In addition, the budget should be read in full, rather than by title, at the hearing if public restrictions have made physical inspection and mailing of the budget impracticable.

 

Cap Exemptions

Expenditures resulting from a state of emergency are treated as an exception to the appropriations cap, the 1977 county levy cap, and the 2010 levy cap (2% cap) law. Regulations state that the 2% levy cap exception for state of emergency is only available for “extraordinary cost” incurred for the immediate preparation, response, recovery, and restoration of public service. Therefore, only the portion of costs exceeding the cost of providing services under non-emergency conditions may be granted as an exemption to the 2% levy cap.

Tax Bills

The Division is strongly recommending that municipalities prepare to issue estimated property tax bills for 2020 in light of the disruption caused by COVID-19. As a reminder, estimated tax bills must be mailed to property owners no later than June 30th and the governing body must adopt a resolution authorizing the estimated tax bills.

We strongly recommend you review this Local Finance Notice with your Chief Financial Officer, Tax Collector, and Administrator. 

Contact: Lori Buckelew, Senior Legislative Analyst, 
lbuckelew@njlm.org, 609-695-3481 x112.


Feb 20

Division Issues Guidance on Levy Cap Referendums

Posted to The Town Crier - Legislative Backgrounder on February 20, 2020 at 12:17 PM by Legislative Staff

The Division of Local Government Services (DLGS) has issued Local Finance Notice 2020-02 providing specific instruction and direction to municipalities considering holding a public referendum on exceeding the 2% Levy Cap or the 2.5% Appropriation Cap.  If your municipality is considering a public referendum we suggest that you review this Local Finance Notice with your professional staff.

The various deadlines for the referendum process are determined by the date the election is held. If the municipality has a Type II board of education the election is held on April 21, regardless when the school board elections are held. If the municipality holds a non-partisan election in May and has an upcoming election then the election is held on May 12. If there is no upcoming non-partisan election then the referendum election is held on April 21. Please note that municipalities with a population under 500 can choose to have a vote by mail election pursuant to N.J.S.A. 19:62-1 et seq.

 A summary of Municipal Levy Referendum deadlines:

Referendum Event

Municipal Levy Cap Referendum on April School Election Date (Partisan)

Municipal Levy Cap Referendum on May Non-Partisan Election

Publication of Notice of Availability of Mail-In Ballots

*Please note that this notice does not bind the municipality to hold an election and does not need to include the referendum amount

February 25

March 17

Submit requests for approval of municipal referendum narrative to Division of Local Government Services

March 20

April 10

Latest date to introduce municipal budget

March 30

April 22

Last date of passage of resolution setting the referendum question (amount) and sending copy to: County Clerk, School Board Secretary (if school vote also taking)place)

March 30

April 22

Deadline to send resolution setting the referendum question to Division of Local Government Services

April 1

April 23

Last date to cancel a planned referendum

March 30

April 22

Latest date to publish municipal budget

April 9

April 30

Election Date

*Please note that the polls must be opened from 6:00 a.m. to 8:00 p.m.

April 21

May 12

Decision of Board of Canvassers

April 29

May 15

Throughout the process the governing body must take the following action:

  • Pass a resolution by simple majority authorizing a “Notice of Availability of Mail-In Ballots”. Please note that due to time constraints the Division of Local Government Services (DLGS) suggests that if the governing body is considering a public question but has not yet made a final decision the notice should be published.
  • Introduce the municipal budget not later than March 30 for the April vote and April 22 for the May vote. The budget must reflect tax levy and provisions of a planned referendum
  • Publication of the introduced budget must be no later than April 9 for the April vote and April 30 for the May vote.
  • Pass a resolution authorizing the referendum question no later than the close of business on March 30 for the April election and April 22 for the May election. This resolution must set forth the exact language of the explanatory statement to be printed on the ballot.
  • Pass a resolution if the municipality has published the Notice of Availability of Mail-In Ballots but chooses not to have the referendum. This resolution must be given to the County Clerk no later than the close of business on March 30 for the April election and April 22 for the May election.
  • Submit a request for a narrative explanatory statement to the Director of the Division of Local Government Services by close of business on March 20 for the April election and April 10 for the May election. Please note that you can contact the Division either in writing or by conference call.
  • Adopt the final budget by May 22 for April election and June 5 for May election.

The referendum must be approved by 50% plus one vote cast to pass otherwise the question fails. If the referendum fails the governing body has the flexibility to amend the budget to meet current needs provided that the governing body initially acted in good faith. It is recommended that the municipality should plan in advance what actions it will take if the referendum is defeated and be prepare to take immediate action to adopt a budget within the 2% levy cap.

Contact: Lori Buckelew, Senior Legislative Analyst, lbuckelew@njlm.org, or 609-695-3481 x112.