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November 14, 2014

Re:      I.          2015 Pension Cost
II.        CY 2015 Municipal Budget Cap Information

Dear Mayor:

I.          2015 Pension Cost

Earlier today, the Division of Pensions and Benefits posted the FY 2015 Pension Employer Contribution rates.  The Employer Pension Contribution rate for 2015 has increased.  For PERS, the average employer contribution has increased from 10.92% to 11.92% and for PFRS, it has increased from 23.25% to 24.32%.

It is important to note that each individual agencies increase or decrease from 2014 will vary depending on other wage factors.  Please consult the comparison charts to get your actual amount due on April 1, 2105.

A copy of the report is available at

II.        CY 2015 Municipal Budget Cap Information

The Division of Local Government Services has issued Local Finance Notice 2014-18 regarding the CY 2015 Municipal and County Budget and Cap Information.

The 1977 budget cap law (which caps APPROPRIATIONS increases) requires the Director of Division of Local Government Services to promulgate the Cost of Living Adjustment (COLA).  The COLA for CY 2015 budgets is calculated at 1.5%.  The governing body may pass a COLA ordinance, increasing the appropriation cap base to 3.5%.

If a governing body wants to increase its allowable appropriations percentage increase in its budget to 3.5%, the following steps must be taken:

1.  After January 1st, and prior to introduction and approval of the budget, an ordinance
must be introduced that details the following:

a. The new rate (increase percent) to be adopted; and

b. The additional amount of appropriations to be added by the increase.

2.  The ordinance must be approved by a majority of the full membership of the
governing body, published, and a public hearing held at least 10 days after the  
publication date.  A certified copy of the introduced action must be filed with the
Director of the Division of Local Government Services within 5 days of its

3.  The governing body may take a final vote on the action any time after the public
hearing and prior to adoption of the budget.  Depending on the form of government,
the chief executive may veto the action in accordance with local procedures.

4.  The ordinance takes effect immediately upon passage, and a certified copy of the
adopted action must be filed with the Director within 5 days.

5.  Cap increase referendums are not permitted if this option is chosen.

In addition the 1977 cap law includes a cap exception for Group Health Insurance.  The 1977 cap exception for Group Health Insurance for CY 2015 will be the increase over 4% up to 7.4%.  The 2010 levy cap exception will be the increase over 2% up to 7.4%.

As was the case in 2012, pension appropriation increases are no longer a 1977 cap law exception.  The 2010 levy cap exception for pensions will be for any increases over 2%. 

The Division will issue the Levy Cap Workbook at a later date.

If you have any questions or need additional information please contact Lori Buckelew at or 609-695-3481 x112.

Very truly yours,

William G. Dressel, Jr.
Executive Director



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