TRENTON – Legislation sponsored by Senator Jeff Van Drew (D-Cape May/Cumberland/Atlantic) to help municipalities live within the new 2 percent property-tax cap by allowing for more practical budgeting practices today was approved by the full Senate.
The bill (S-2232) would allow municipalities to create a reserve for uncollected property taxes at an amount less than required by standard formulas, which base the required amount on the previous year’s uncollected taxes. With the recommendation of the chief municipal finance officer – and approval from the state – municipalities would be permitted to set aside a reserve based on real-time estimates of the amount that will go uncollected, taking into account unique circumstances occurring within their towns or cities.
“Local officials know best the special circumstances existing in their municipalities that may affect property tax collections,” said Senator Van Drew. “By giving these municipal officials, in consultation with their professionals, the power to revise expected collections, we will prevent municipalities from having to pour precious public resources into their reserves merely to meet a state-imposed quota.”