Governor Murphy signed P.L. 2025, c.185 on December 23, 2025, amending several key statutory provisions: budget and annual financial statement (AFS) submission deadlines, audit submission, and deadlines for filling vacancies in certain mandatory positions. The Division of Local Government Services issued Local Finance Notice 2026-25 providing guidance on the new law.
N.J.S.A. 40A:4-5 and 40A:4-10 have been amended to codify what have been the Local Finance Board-extended budget introduction and adoption deadlines of March 31 and April 30, respectively. County and CY municipal budgets must be introduced on the date of the first regularly scheduled governing body meeting after March 31, and budgets must be adopted on the date of the first regularly scheduled governing body meeting after April 30, will not be considered late. One key change for CY municipal budgets requires mayors in a Faulkner Act Mayor-Council form, and municipal managers in a Faulkner Act Council Manager Form or the 1923 Municipal Manager Law, to submit their recommended budgets to the governing body by no later than February 28 instead of January 15.
Section 6 of P.L. 2025, c.185 amends N.J.S.A. 40A:4-19 to increase the maximum total appropriations for the temporary budget of a county or CY municipality from 26.25% to 35%. The increased maximum percentage continues to exclude appropriations made for interest and debt redemption charges, a capital improvement fund, and public assistance.
The personal penalty placed on governing body members that fail or refuse to comply with the Local Budget Law, including noncompliance with a Director Order to introduce or adopt a municipal or county budget, is increased to $100 per day from the previous $25 per day.
The Local Finance Board has extended the municipal and county Annual Financial Statement (AFS) filing deadline to March 10. The AFS filing deadline for SFY municipalities remains August 10. The Director is now authorized to impose a $100 personal daily fine upon chief financial officer for noncompliance, an increase from the original $5 per day penalty.
Regarding audits, the deadline for annual audit completion has been extended to no later than the last day of the eighth month after the close of the fiscal year. For local units on calendar year budget cycles, the deadline for completing the annual audit for 2025 and years forward is now August 31. As before, the audit must be filed with the Division in FAST within five (5) days after being filed with the local unit. The deadline for filing with the Division is 45 days from the date of receiving the audit for the certification of the governing body’s review of the audit and 60 days from the date of receiving the audit for the corrective action plan. See Local Finance Notice 2024-10 for further details. The Director is now authorized to impose a $100 personal daily fine upon an auditor, governing body member, or other local official responsible for noncompliance.
Additionally, P.L. 2025, c.185 amended various provisions of law to establish a standard 90-day deadline for filling a vacancy for Certified f Municipal Finance Officer (CMFO), Certified Tax Collector (CTC), Registered Municipal Clerk (RMC), and Certified Public Works Manager (CPWM). The local unit’s governing body or Chief Executive Officer may make a written request to the Director for an extension.
P.L. 2025, c. 185, affirms the Director’s ability to review the behavior or practices of individuals holding a CTC, RMC, CPWM, or Qualified Purchasing Agent (QPA) certificate. The Director may suspend or revoke certifications awarded by the Division for dishonest practices, or willful or intentional failure, neglect, or refusal to comply with the State constitution, laws, and regulations pertaining to their duties and functions, or for other good cause.
Additionally, the governing body of a calendar year municipality may adopt a resolution seeking Director approval to mail estimated tax bills after the June 30 deadline established by N.J.S.A. 54:4-66.3. If the municipality demonstrates good cause, the Director may approve the application subject to appropriate terms and conditions. The Director’s determination shall be final. The deadline for mailing reconciled bills remains September 30. Using the same process, State Fiscal Year municipalities may also seek Director approval to mail estimated tax bills after December 31 (first installment) and June 30 (third installment). The deadline to mail reconciled tax bills for the second and fourth installments remains March 31 and September 30, respectively. The governing body resolution requesting an extension must be submitted via email to DLGS@dca.nj.gov with the subject line titled “Post-Deadline Estimated Tax Bills.”
No mailing of FAST-Submitted documents to the division is accepted. Any documents required to be submitted through the Financial Automation Submission Tracking (FAST) system may not be sent to the Division via regular mail or email.
We suggest you review this Local Finance Notice with your municipal professionals.
Contact: Erin Knoedler, Legislative Analyst, eknoedler@njlm.org, 609-695-3481, x116.