February 23, 2012

Re:      FY 2013 State Aid Released Budget Language for Best Practices Incentive

Dear Mayor:

The Division of Local Government Services has issued Local Finance Notice 2012-6 which releases the CY 2012/SFY 2013 “State Aid” certification.  The Governor’s proposed FY 2013 budget has no municipality receiving less “State formula aid” than received under the State FY 2012 budget.

The CY 2012/SY 2013 Aid Certifications for each municipality will be posted at noon on today on the Division’s website at www.nj.gov/dca/lgs/muniaid/aidmenu.shtml
(These certifications will allow you to see the State’s bookkeeping shift of CMPTRA funding to the Energy Tax and allow your Finance professionals to compute total property tax relief funding due to your municipality.)  The certifications show aid allocations for each municipality and are used in preparing the revenue section of the CY 2012 budget.  The new municipal “state aid” figures are available at:  www.state.nj.us/dca/lgs/muniaid/12_aid/11-13_st_aid_cert.xls .  A final aid payment schedule will be provided in July prior to the first payment on August 1. 

The Governor’s budget proposal also continues the “Best Practices Incentive” program to encourage municipal officials to adopt a range of “best practices” as an incentive to receive a full payment of Consolidated Municipal Property Tax Relief Aid (CMPTRA) and Energy Tax Receipts (ETR).  In order to receive the final five percent (5%), a municipality will have to certify that it meets a variety of best administrative, financial management or operational practices.  The budget proposes that withheld funds be reallocated as rewards to municipalities that establish exceptional scores.  Additional information on Best Practices will be released in the upcoming weeks.

The SFY 2013 budget proposal funds the Transitional Aid to Localities Program at $113.7 million - $56.4 million less than currently budgeted - and reflects Governor Christie’s commitment to keeping this discretionary aid as a temporary program for municipalities who are transitioning to self-sufficiency.  Municipalities that received Transitional Aid under the SFY 2012 budget will likely see a reduction in the total amount of funds received between formula aid and Transitional Aid. Total aid allocations for these municipalities will not be known until the Transitional Aid Application Process has concluded (early March for CY municipalities and September for FY municipalities).

If you have any questions or need additional information please do not hesitate to contact Jon Moran at jmoran@njslom.com or 609-695-3481 x121.

Very truly yours,

William G. Dressel, Jr.
Executive Director