Adds to property tax levy cap exclusions increases in flood insurance premiums.
Impact
Under A2904, local governments that had flood insurance prior to changes in federal flood maps will be allowed to exclude any increase in flood insurance premiums that exceeds a 2% increase from the previous year's premiums in the initial year following the map change. Alternatively, governments without prior flood insurance can exclude the entire cost of initial premiums incurred after the change. The bill permits this exclusion to continue for the second, third, and fourth years following the changes to federal maps, effectively recognizing the ongoing financial pressure these adjustments may impose on communities.
Summary
Assembly Bill A2904 aims to amend P.L.2007, c.62 by allowing local units of government in New Jersey to exclude certain increases in flood insurance premiums from the calculation of their property tax levy cap. This bill is a response to the effects of changes made to federal flood insurance maps, which can significantly impact local units that rely on property taxes for budget preparation. Specifically, the bill seeks to facilitate these units in managing the financial burdens associated with flood insurance, especially in the wake of federal map updates.
Conclusion
Overall, A2904 represents a targeted legislative effort to address the specific challenges local units face in adapting to changes in federal flood insurance policies. By providing temporary relief in tax calculations, the bill aims to better equip municipalities to navigate the complexities associated with flood insurance, thereby fostering resilience and preparedness against flooding events.
Contention
The introduction of A2904 highlights the balance local units must strike between maintaining a sustainable tax base and addressing the real costs of flood preparedness. While proponents argue that this bill will alleviate the financial constraints municipalities face and potentially enhance their capacity to manage disaster-related risk, opponents may raise concerns regarding the implications for property tax revenues and the broader fiscal health of local budgets. The exclusion from the property tax cap may also lead to debates on the fairness of tax burdens within different regions, especially those with varying flood risks.