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Emergency Management & Public Health

Posted on: August 9, 2020

Governor Conditionally Vetoes CRB Bill

On July 31 Governor Murphy issued a conditional veto for A-3971, which authorizes the issuance of "coronavirus relief bonds" (CRBs) by municipalities and counties. In the conditional veto language the Governor acknowledge the need for local governments to be provided with “an essential tool to help them maintain fiscal solvency during and in the aftermath of the COVID-19 pandemic. However, the better pathway to accomplish this result is to build upon the well-established local budgetary and debt structures in facilitating critical relief, rather than to create a new, additional financing mechanism for this singular purpose.”

The Governor’s conditional veto removed the original bill language including the ability to bond for revenue losses related to COVID-19 and replaced it with the issuance of special emergency appropriation for the immediate preparation, response, recovery, and restoration of public services in response to COVID 19 and a deficit in prior year operation during or in the immediate next fiscal year due to COVID19. A “deficit in operations” was defined as a deficit balance reported on a local unit’s “Results of Operation” schedule of the annual financial statement. The conditional veto includes a certification by the Chief Financial Officer approved by majority vote of the governing body; a 45-day window for Division of Local Government Services (DLGS) to review and either approve or deny the application, in writing; and a longer repayment scheduled if the current repayment schedule would cause significant fiscal distress as outlined in the conditional veto.

The conditional veto also permits the DLGS to promulgate general guidance modifying the standard for anticipated revenues when the amount realized in cash from the same source during the next preceding fiscal year experienced reductions due to COVID19 to address the budgetary requirement that the budgeted anticipated revenues cannot exceed the previous year’s realized revenues.

Under the conditional veto, local units would be prohibited from borrowing monies that may be considered duplicative of financial assistance provided by the federal government, State, or other sources to address COVID19.

The League does not support the conditional veto but continues to work with the sponsors, legislature, Administration, and local government partners to ensure that municipalities have the needed flexibility to address not only the expenses related to COVID-19 but the lost revenue as a result of the pandemic.

Contact: Lori Buckelew, Assistant Executive Director, lbuckelew@njlm.org, 609-695-3481 x112.

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