During Wednesday’s Local Finance Board Meeting, they unanimously approved exceptions to the appropriation cap. Under N.J.S.A. 40A:4-45.3d, the Local Finance Board has the authority to grant additional exceptions under extraordinary circumstances that result in an unanticipated increase in expenditures for a service essential to the health, safety, and welfare of the residents of New Jersey for only one budget year. Under this provision, the Local Finance Board granted appropriation cap relief for the 2023 budget year regarding the following budgetary items:
- Garbage collection and disposal
- Recycling costs
- PERS and PFRS pension contributions
- Gas and diesel fuel
- Workers’ Compensation Insurance
- Health Insurance
This appropriations cap relief applies to increases above the 3.5% increase of the previous year. The Division of Local Government Services (DLGS) will be issuing a workbook shortly for municipalities to calculate these exemptions.
DLGS Director Jacquelyn Suarez encouraged municipalities to explore all avenues of cost savings – shared services, discretionary spending, and labor agreements – because while this step was not taken lightly, the board will be very reticent to extend it beyond one year. The League will share DLGS information when it is available.