New Jersey Assembly Bill A2991

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

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.

Impact

The bill proposes to increase municipal aid by an amount equivalent to 50% of the difference between the amounts distributed in fiscal years 2008 and 2012, with full restoral beginning in fiscal year 2024. This effectively establishes a more robust safety net for local governments, allowing them to better manage their financial obligations without excessively increasing local tax rates. Furthermore, the bill extends protections known as the 'poison pill,' guaranteeing that no municipality will receive less aid than they did in 2012, fostering improved budgetary stability across municipalities.

Summary

Assembly Bill A2991 aims to enhance the financial support provided to municipalities in New Jersey by increasing the distribution of funds from the Energy Tax Receipts Property Tax Relief Fund over a two-year period. This bill is especially significant as it seeks to restore some of the municipal aid that was reduced during the fiscal constraints experienced from 2009 to 2011. Specifically, this supplemental funding is estimated to restore around $331 million in reductions to both the Consolidated Municipal Property Tax Relief Aid (CMPTRA) and the Energy Tax Receipts Property Tax Relief Aid (ETR Aid).

Contention

One notable aspect of A2991 is its stipulation that municipalities cannot anticipate the receipt of these additional state funds when preparing their annual budgets. This prohibition aims to ensure responsible fiscal planning and accountability. By mandating that any additional ETR aid received be deducted from the municipality’s adjusted tax levy for the next fiscal year, it encourages responsible tax levying practices, which may prompt discussions about financial management strategies among local governments.