February 10, 2012
Re: CY 2012 Cap Referendum Procedures
Earlier today, the Division of Local Government Services released Local Finance Notice 2012-5 which provides guidance on the Municipal Levy Cap Referendum Procedures for CY 2012. The Notice provides specific guidance for calendar year municipalities on both the 2% levy cap and the 2.5% appropriation cap.
The CY 2012 levy cap referendum will take place on Tuesday, April 17 for partisan municipalities and Tuesday, May 8 for non-partisan municipalities. However, if there is no non-partisan election scheduled, the non-partisan municipalities will use the April 17 election date.
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 which holds their election in April - Municipalities with a Type II school district, which holds their election in April, will have the levy cap referendum on the same ballot (in a separate space) and same polling location as the school board election. 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 or Type II with a November school board election - Municipalities with a Type I school district (which do not have annual school board elections) or Type II with a November school board election 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:
1. The governing body passes resolution by simple majority authorizing publication of Notice of Availability of Mail-In Ballots. Due to the statutory constraints, if the governing body is considering, but has not made a final decision, it should publish this notice to ensure that it does not lose the opportunity to hold a levy cap referendum:
a. Due date: in time for display ad to be published by February 22 (April election) and March 13 (May election).
b. Coordinate with County Clerk and County Election Officials.
Send copy of adopted resolution to Division of Local Government Services and School Board Secretary.
d. 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 17.
2. The municipal budget must be introduced no later than March 30 (April election) and April 20 (May election). Publication of the introduced budget must take place no later April 5 (April election) and April 26 (May election).
3. 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:
a. Due date: Close of business on March 30 (April election) or April 20 (May election)b.A certified copy of the resolution must be sent to the County Clerk no later than close of business on March 30 (April election) or April 20 (May election).
Coordinate with the County Clerk in advance if possible
By next business 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.
4. 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 requests for narratives must be received by the Director by the close of business on March 21 (April election) and April 13 (May election). Request must be submitted to the Director in each of two ways:
a. in writing from the Mayor or presiding office of the governing body; and
b. by telephone call to the Division at 609-292-6110 to request a conference call with the Director to discuss the request.
- Results of Election:
- Certified by Board of County Canvassers to municipality and Division of Local Government Services, due by April 23 (April election) and May 9 (May election)
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 (April election) and June 1 (May election).
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.
If the municipality has published the Notice of Availability of Mail-In Ballot but chooses not to go through with the referendum the governing body must pass a resolution to that effect and publish a legal notice that the levy cap referendum will not be held as previously announced.
Also sample documents and a summary of key steps and actions regarding the Levy Cap Referendum are available in Local Finance Notice 2012-5.
Questions of the levy cap referendum can be sent to the Division at email@example.com or by calling 609-292-4806.
Very truly yours,
William G. Dressel, Jr.