New Jersey Assembly Bill A959

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

Allocates nondedicated portion of State realty transfer fee collections to municipal property tax relief.

Impact

The legislation would amend various existing laws to ensure that the realty transfer fees, specifically the portion not earmarked for other purposes, are redirected to municipal assistance. Counties will continue to receive their share of the fees, and existing commitments to funds such as the New Jersey Affordable Housing Trust Fund and the Shore Protection Fund will remain intact. The bill underscores a commitment to maintaining local property tax levels, which proponents argue is essential for community stability and growth.

Summary

Assembly Bill A959 aims to provide financial relief to municipalities in New Jersey by allocating the nondedicated portion of the State's realty transfer fee collections for property tax relief. Specifically, the bill requires that municipalities receive this portion of revenue derived from both the general purpose fee and the basic fee collected on real estate transactions. The bill seeks to empower local governments to utilize this funding to reduce their property tax levies, thus providing direct financial support to residents and property owners within these municipalities.

Contention

While the bill is positioned as a means of easing the financial burdens faced by local governments, debates may arise regarding the long-term fiscal health of the State's General Fund. Critics may argue that diverting these funds could undermine state resources necessary for broader public services. Additionally, the implementation of a five-year phase-out period during which a decreasing share of these funds is retained by the State is likely to be a focal point of contention, as it adds a transitional dynamic that could complicate budget forecasts for municipalities.

Transition

A pivotal part of the approach includes a gradual reduction in the State's retention of the fees, starting at 80% in the first fiscal year after enactment and progressively decreasing to 0% by the fifth year. This mechanism is designed to mitigate any sudden impacts on the State's budget, allowing for a smoother transition as municipalities become more reliant on this new revenue stream for operational support and to meet budgetary needs.