Office of Legislative Services
State House Annex
P.O. Box 068
Trenton, New Jersey 08625
Legislative Budget and Finance Office
Phone (609) 847-3105
Fax (609) 777-2442
www.njleg.state.nj.us
LEGISLATIVE FISCAL ESTIMATE
[Second Reprint]
SENATE, No. 330
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: MARCH 7, 2022
SUMMARY
Synopsis: Increases distribution to municipalities from Energy Tax Receipts
Property Tax Relief Fund over two years; prohibits anticipation of
certain revenue in municipal budget; requires additional aid be
subtracted from municipal property tax levy.
Type of Impact: Increase in State expenditures and municipal revenues.
Agencies Affected: Department of the Treasury and municipalities.
Office of Legislative Services Estimate
Fiscal Impact FY 2023 FY 2024 and after
State Cost Increase $165.1 million $330.1 million
Local Revenue Increase $165.1 million $330.1 million
The Office of Legislative Services (OLS) determines that enactment of the bill would result in
an annual $330 million increase in State costs and municipal revenues, to be phased over a
two-year period. These expenditures would be in the form of additional State aid distributed
to municipalities through the “Energy Tax Receipts Property Tax Relief Fund” (ETR Fund).
Under the phase-in schedule established by the bill, municipalities would receive an additional
$165.1 million, or 50 percent of the total amount of supplemental State Aid in fiscal year (FY)
2023. The full 100 percent would be provided in FY 2024 and each fiscal year thereafter.
Although the bill requires the maximum permissible property tax levy of each municipality
to be reduced by the amount of the aid increase, the impact of the bill on municipal property
taxes would vary widely. FE to S330 [2R]
2
BILL DESCRIPTION
The bill amends the “Energy Tax Receipts Property Tax Relief Aid Act,” P.L.1997, c.167 to
require the distribution of additional State aid to municipalities. The bill restores, over a two-year
period, approximately $330 million in reductions to Consolidated Municipal Property Tax Relief
Aid (CMPTRA) and Energy Tax Receipts Property Tax Relief Aid (ETR Aid) first imposed in FY
2009, FY 2010, and FY 2011 due to State budget constraints.
In FY 2023, municipalities would receive an aid increase equal to 50 percent of the difference
between their total payment of CMPTRA and ETR Aid in FY 2008 and FY 2012. The fully
restored amount would be distributed beginning in FY 2024 and in each fiscal year thereafter. The
bill also extends the existing ETR Aid “poison pill” protection to ensure that each municipality
receives an aid amount not less than the combined payment of CMPTRA and ETR Aid to
municipalities in FY 2012 and the additional aid distributed under the bill.
The bill also amends current law to require a municipality to subtract any additional amount
of ETR Aid it receives pursuant to the bill from its adjusted tax levy when computing that amount
for its next fiscal year. By deducting the additional amount of ETR Aid from the previous year’s
levy, municipalities would be permitted to raise a lower amount of taxes through the levy for
municipal purposes.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS determines that enactment of the bill would result in an annual $330 million increase
in State costs and municipal revenues, to be phased in over a two-year period. These expenditures
and revenues would be in the form of additional State aid distributed to municipalities through the
ETR Fund.
The Fiscal Year 2022 Appropriations Act provides $1.254 billion in ETR Aid for FY 2022. A
portion of that amount is a direct appropriation of $788.5 million from the Property Tax Relief
Fund. The difference, $465.2 million, is transferred from the State appropriation for CMPTRA
and supports the annual inflation adjustment required by current law. Under this bill, the total
amount of ETR Aid would increase to approximately $1.584 billion by the end of FY 2024.
The bill further requires the additional ETR Aid to be subtracted from the maximum
permissible property tax levy for the next fiscal year. The OLS notes that the total additional
amount distributed to each municipality by the end of the phase-in schedule ranges from $450 to
$18.9 million. Accordingly, the offsetting impact the bill may have on maximum and actual
municipal property taxes would vary widely across municipalities.
Section: Revenue, Finance, and Appropriations
Analyst: Scott A. Brodsky
Principal Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer FE to S330 [2R]
3
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).