The Division of Local Government Services (DLGS) has issued Local Finance Notice 2025-01 providing specific instructions and directions 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 15 regardless of 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 13. If there is no upcoming non-partisan election, then the referendum election is held on April 15. Referendums for State fiscal year municipalities will be at the November General Election. 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.
It is important to also note that there are various deadlines for municipalities considering a levy cap referendum. The first deadline is the publication of a display advertisement announcing that a referendum may be held. The deadlines are February 18 for April levy elections and March 18 for May levy elections.
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 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. The publication of the notice does not bind the municipality to hold an election, and the referendum does not need to be included in the notice.
- Introduce the municipal budget no later than March 26 for the April vote and April 23 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 23 for the April vote and May 1 for the May vote.
- Pass a resolution by full majority authorizing the referendum question no later than the close of business on March 26 for the April election and April 23 for the May election. All referendum questions and explanatory statements must be consistent with the model Authorizing Referendum resolution included in the Local Finance Notice. The county clerk must receive a copy of this resolution by close of business on March 26 for the April vote and April 23 for the May vote. Given the timing for County Clerks to print ballot material, particularly mail-in ballots, the Division strongly recommends that municipal officials review the draft resolution with their county election officials ahead of the governing body vote.
- Pass a resolution and publish a legal notice 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 26 for the April election and April 23 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 7 for the April election and April 10 for the May election. An email including the proposed language and an explanation of circumstances of why identifying changes in appropriations or revenues is not sufficient must be sent to dlgs@dca.nj.gov. At the same time, you must set up a conference call with the Director by calling the Division at 609-292-6613.
- Adopt the final budget by May 9 for April election and June 6 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 must amend the budget to reflect the allowable levy.
The Local Finance Notice also highlights:
- Referendum costs are excluded from the cap only if the question passes and was built into the amount proposed in the referendum. If the referendum fails, election costs must be absorbed in the budget within the levy cap.
- Referendum question must include the amount of increase above the cap and a statement explaining the circumstances that identifies the changes in appropriations or revenues that warrant the asking of the public question. The narrative cannot include discussions of actions, other than in general terms, that will be taken if the referendum fails.
- Municipal resources (newsletters, mailings, websites) may be used to inform the public about the referendum, but those resources must be strictly informational.
- Nothing prohibits individual public officials from offering their personal opinions through other means (e.g., personal contacts, press interviews, letters to the editor, etc.)
- If a referendum is necessary on both caps, a single ballot question will be used to meet the statutory requirements.
- If an election is held on the same day as School Board Elections the polls must be open from 6:00 a.m. to 8:00 p.m. and the municipality is responsible for paying 50% of the cost of conducting the election during the school board election (typically 4:00 p.m. to 8:00 p.m.) and the full, incremental cost of the election for hours above and beyond the balloting.
If your municipality is considering holding a referendum, we suggest you review the Local Finance Notice with your administrator, chief financial officer, and municipal clerk.
Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x112.