July 13, 2011
Re: State of CY 2011 Property Tax Bills and Statement of State Aid
Today the Division of Local Government Service advised your Chief Financial Officer, Municipal Clerk and Tax Collector that the Division of Local Government Services will work to release the Statements of State Aid by July 21st so county tax boards can certify tax rates and printing of property tax bills can start.
The State’s FY 2012 budget made an additional $150 million of school aid available to non-Abbott school districts. Because property tax rates have not yet be certified by the county boards of taxations, boards of education will be permitted to reconsider their FY 2011-2012 budgets and reduce their property tax levies by recognizing the new aid as revenue in their budgets. Boards of education will have until 4:00 p.m. on Tuesday July 19th to make final decisions concerning their tax levies.
The Division of Local Government Services and the Department of Education will work to release all statements of State Aid by July 21st. Unfortunately, their process does not permit the agencies to prepare certificates for individual municipalities one-at-a-time, they must all be done at one time.
As a reminder, N.J.S.A. 54:4-66.3d provides that third quarter property taxes shall not be subject to interest until the later of August 1st, the additional interest free period authorized by N.J.S.A. 54:4-67, or the twenty-fifth (25) calendar day after the tax bills or estimated tax bills for the third quarter were mailed. The tax bills or estimated tax bills must contain a notice specifying the date on which interest will begin to accrue back to August 1. This notice must either be on the tax bill itself, or enclosed as an insert with the tax bill, to inform the taxpayer of the deadline for the interest-free period.
In addition, the statutes allow for tax payments to the counties and schools to be deferred until 25 days from the time the tax bills are mailed, or no later than September 1st for schools (N.J.S.A. 54:4-75) and September 15th for counties (N.J.S.A. 54:4-74). The Division is encouraging officials in these agencies to work with each other to review cash flow needs and where possible, modify existing payment schedules to accommodate the restricted cash flow of the municipality.
In the event a municipality faces a short-term cash flow issue, the Division has noted that the following several options available, depending on your fiscal status and cash flow needs:
- immediately issue estimated 3rd quarter property tax bills
- issue tax anticipation notes
- carefully review their cash flow needs and resources, projecting property tax receipts once tax bills are issued and revenue flow begins and manage their cash flow accordingly
We suggest you discuss this notice with your Administrator, Chief Financial Officer and Tax Collector. We will continue to keep you apprised of the situation and advise you as information becomes available.
Very truly yours,
William G. Dressel, Jr.