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February 28, 2011

Re:      CY 2011 Cap Referendum Procedures

Dear Mayor:

Earlier today, the Division of Local Government Services released Local Finance Notice 2011-9 which provides guidance on the Municipal Levy Cap Referendum Procedures for CY 2011.  The Notice provides specific guidance for calendar year municipalities on both the 2% levy cap and the 2.5% appropriation cap. 

The CY 2011 levy cap referendum will take place on Wednesday, April 27, the day of the statewide annual school board elections.  The election procedure for the cap referendum will vary depending upon if the municipality is a Type I or Type II school district.  The general procedures are as follows:

  • Type II School District - Municipalities with a Type II school district will have the levy cap referendum on the same ballot (in a separate space) as the school election ballot.  Regardless of the hours set by the Board of Education, if there is a municipal levy cap election, the polls must be open from 7:00 a.m. to 9:00 p.m.  The municipality shall pay 50% of the election costs incurred during the hours established by the Board of education, and 100% of the costs incurred in any additional hours.
  • Type I School District - Municipalities with a Type I school district (which do not have annual school board elections) will be fully responsible for all the costs of the election.  The voting hours must mirror those of the general election, 6:00 a.m. to 8:00 p.m. and the polling places will be the same locations that are used for a general election.
  • A municipality with a population of less than 500 may choose to have a vote-by-mail election, as set forth in N.J.S.A. 19:62-1, et seq.

There is an extremely tight deadline that municipalities must follow in order to hold a levy cap referendum.   Below is a summary of the key steps and actions:

  • The governing body passes resolution by simple majority authorizing publication of Notice of Availability of Mail-In Ballots:
    • Due date: in time for display ad to be published by March 7.
    • Coordinate with County Clerk and County Election Officials.
    • Send copy of adopted resolution to Division of Local Government Services and School Board Secretary.
    • Passing this resolution does not commit the governing body to hold the question but is necessary if the governing body is considering a referendum. If the governing body decides not to hold a referendum they must adopt a resolution and place a legal notice that a levy cap referendum will not be held on April 27.
  • The governing body passes a resolution by a majority of the full membership, prior to the introduction of the budget, setting the Referendum Question.  All referendum questions and explanatory statements must be consistent with the Division’s model:
    • Due date: Close of business on April 8, or 3 days after adoption of the resolution, whichever is sooner.
    • Coordinate with County Clerk in advance if possible.
    • By next day, send copy of adopted resolution to Division of Local Government Services and School Board Secretary.
    • Include copy with introduced budget package sent to Division of Local Government Services.
  • As an option the governing body may request the Director of the Division of Local Government Services to approve a narrative explanatory statement.  The Director will only consider narratives that are factual, explicit and to the point concerning the reasons for the proposed increase, and written in a manner consistent with a description of increases.  Narratives that discuss the impact of not approving the referendum will not be approved.  All request for narratives must:
    • As soon as possible, prior to April 1, discussion with county election officials.
    • By April 1, request in writing permission from Director of Local Government Services, and contact Director’s office by phone.
  •  Results of Election:
    • Certified by Board of County Canvassers to municipality and Division of Local Government Services, due by May 2.

The cap referendum must be approved by 50% plus 1 of the votes cast regarding the question.  If the vote is less the question fails.  If the question is approved this levy will become the new base for the municipality.  If the question fails the governing body must amend their budget to meet the 2% levy cap.  Given the potential for defeat of the referendum, the municipality should plan in advance what actions it will take if the referendum is defeated and be prepared to take immediate action to adopt the budget within the 2% levy cap.  Please note that the cost of the levy cap question is not excluded from the 2% levy cap.

The final budget for municipalities conducting a referendum must be adopted by Friday, May 20.  This date supersedes the May 13 date originally issued in Local Finance Notice 2011-2.

Also, please note that the Division has issued guidance on the use of public funds to promote the levy cap referendum.  While municipal resources, such as newsletters, mailings and website, can be used to inform the public about the referendum that information must strictly be informational.  Nothing, however, prohibits individual public officials from offering their own personal opinions through other means.

Questions of the levy cap referendum can be sent to the Division at or by calling 609-292-4806.

Very truly yours,

William G. Dressel, Jr.
Executive Director




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