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  • NJ A2846
  • Excludes appropriations to reserve for uncollected taxes in excess of two percent from calculations of municipal adjusted tax levy.
Introduced
(2/16/2016)
In Committee
(2/16/2016)
Crossed OverPassedSignedDead/Failed/Vetoed
2016-2017 Regular Session
This bill provides that municipalities may exclude appropriations to the reserve for uncollected taxes in excess of two percent from their calculation of the adjusted tax levy. Municipalities are required to provide 100% of the tax levy for their municipality, their school district, any special districts, and their county, regardless of the actual collection rate. To cover any shortfalls in the 100% collection rate, the municipality must budget a non-spending appropriation through a budget line item known as the reserve for uncollected taxes. P.L.2010, c.44 provided exemptions to the two percent levy cap for capital expenditures, increases in pension contributions and accrued liability for pension contributions in excess of two percent, certain increases in health care costs in excess of two percent of the total health care costs in the prior year, and certain extraordinary costs incurred by a local unit directly related to a declared emergency. As a result, the increase to the tax levy for the school district, special districts, and the county could exceed two percent. Under current law, if a municipality's collection rate is less than 98 percent, the municipality will be responsible for appropriating sufficient funds, through its reserve for uncollected taxes, to cover the shortfall for the other taxing districts that are in excess of two percent. Consequently, municipalities are now forced to further cut their municipal levy in order to meet the two percent tax levy cap to guarantee the 100 percent collection rate for the school district, special districts, and the county. Any municipality that does not collect 100 percent of taxation annually is hampered in its ability to provide services and property tax relief due to the fact that the other taxable entities (the school district, special districts, and the county) automatically receive 100 percent of their taxes billed. This bill would redress this imbalance by excluding appropriations to the reserve for uncollected taxes in excess of two percent from calculations of the municipality's adjusted tax levy. This bill also includes technical corrections to the law that are required for consistency with the Governor's Conditional Veto to Senate, No. 29 of 2010, that was enacted as P.L.2010, c.44.
Not specified
Introduced, Referred to Assembly State and Local Government Committee  (on 2/16/2016)
 
 
Date Chamber Action Description
2/16/2016 A Introduced, Referred to Assembly State and Local Government Committee
Date Motion Yea Nay Other
None specified