Acting Governor Way signed into law A-5240/S-3941, which makes various changes to the local unit budget process and related operations. 

The new law changes statutory budget and audit related deadlines as follows: 

The new law also updated municipal manager’s responsibilities to reflect a new budget transmission date to municipal council on or before February 28 and the deadline for State Fiscal Year municipalities budget adoption to September 20 or the next regularly scheduled meeting of the governing body.

Due to the new statutory deadlines, the new law also increases the temporary budget appropriation amount for calendar year municipalities or counties from 26.25% of the total appropriations made in the preceding fiscal year to 35% of the total appropriations made in the preceding fiscal year. For municipalities operating under a state fiscal year budget, the temporary budget appropriation remains at 26.25% of the total appropriations made in the preceding fiscal year. 

The new law also requires the local unit to be responsible for any necessary investigations and corrective action on audit findings. 

In addition, the law made changes to the fines and penalties that may be imposed upon a governing body. The daily fine if the governing body fails or refuses to comply with an order from Division of Local Government Services (DLGS) Director increased from $25 per day to $100 per day. The law also created new fines, including one fine of $100 per day for governing body member or other responsible local unit officials’ refusal or failure to comply with conducting an audit. Another fine of $100 per day for the governing bodies’ failure to appoint a Chief Financial Officer, Municipal Clerk, Tax Collector, or Public Works Manager and another $100 per day fine for local government officials’ failure to file an Annual Financial Statement. Any fine imposed on a governing body member or local government official cannot be paid with public funds and must be paid personally by the governing body member or local government official. 

The new law also addresses vacancies of Chief Municipal Finance Officer (CMFO), Municipal Clerk, Tax Collector, and Public Works Manager. Within 90 days of vacancy of these positions, the governing body must appoint a replacement. The law does permit the DLGS Director to grant an extension. In lieu of an appointment, the governing body may enter into a shared service agreement to fill the vacancy. The law does permit the appointment of a person with a state certification as a temporary CMFO, an Acting Municipal Clerk, or a Public Works Manager on an interim basis.  

The law also permits the DLGS Director to initiate a review of the behavior or practices of a Registered Municipal Clerk, Certified Tax Collector, Certified Public Works Manager, or Qualified Purchasing Agent if the Director finds it advisable to do so through the normal exercise of the Director’s statutory duties and responsibilities of the position.  

The new law also permits the DLGS Director to authorize a municipality to mail estimated tax bills after December 31 for first installment or June 30 for third installment upon good cause being shown and upon the terms and conditions the Director deem reasonable. The Director’s determination to grant an extension is final. 

P.L. 2025, c. 185 took effect on December 23, 2025, and will apply to the next local fiscal year. We anticipate that the DLGS will shortly issue a Local Finance Notice on the implementation of P.L. 2025, c. 185.  

Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x. 112.