TRENTON – The Senate and the General Assembly have granted final legislative approval to a measure sponsored by Senator Nicholas J. Sacco that is designed to enable public libraries with healthy budget surpluses to aid municipalities that are starved for revenue in the struggling economy.
“Many libraries are holding an enormous surplus, a good deal of which came from the municipality to begin with,” said Senator Sacco (D-Bergen/Hudson). “Given the fact that many municipalities are now struggling due to a loss in revenue and state aid brought on by the recession, this bill will allow one healthy partner in the community to help out the struggling partner. Ultimately, this measure will help provide relief for property taxpayers while still protecting municipal libraries that are not as financially stable as others.”
Under current law, a free municipal library may transfer any portion of its surplus over 125 percent of its current operating budget to the municipality upon approval by the State Librarian, excluding funds restricted for capital projects and grants. However, current budgeting standards recommend a goal of a 20 percent surplus of any entity’s operating budget, while most public bodies actually hold a surplus of 10 percent or lower. This bill, A-2911 (S-2070), would require a free municipal library to transfer any budget surplus amount that exceeds 20 percent of its audited operating expenditures for the previous year to the municipality in which it resides, excluding funds designated for capital improvements or grants.
The measure is intended to deliver property tax relief by helping struggling municipalities remain under the state-mandated property tax levy cap. The bill is designed to ensure that libraries maintain enough money to operate while also maintaining the current funding formula. Municipal libraries that are not in good financial standing would not be affected by this bill until such time as they have built a surplus in excess of 20 percent of their operating budget.
The Senate approved the bill by a vote of 24 – 11, while the Assembly approved the bill by a vote of 49-25-4. The bill now heads to the Governor’s desk.
# # #
