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April 15, 2010

RE: Regulatory Flexibility Possible on Levy Cap

Dear Mayor:         

Yesterday in Trenton, Department of Community Affairs (DCA) Commissioner Lori Grifa testified before the Assembly Budget Committee. Her comments focused on the Department’s proposed budget for the State’s next fiscal year, which begins on July 1.

After her prepared testimony, Assemblyman John Burzichelli questioned the Commissioner regarding the provision in the Governor’s proposed budget that would penalize a municipality which increases its levy beyond 4% to recover reductions in State formula aid programs. (See our April 1 letter at for details on this provision.)

In response to the question, Commissioner Grifa acknowledged that some municipalities may need levy cap flexibility in order to meet the legitimate service needs of their citizens. She indicated that the Division of Local Government Services (DLGS) will soon provide guidance to those towns that will need to ask the Local Finance Board for a cap waiver under existing law.

We have contacted the Division of Local Government Services on this. We will share any further guidance with you as soon as it is available.

Again, while we continue to pushfor removal of the proposed language from the proposed budget, we appreciate this recognition of the need for flexibility in the administration of budget caps.

If you have any questions on this, pending DLGS guidance, contact Jon Moran at 609-695-3481, ext. 121.

Very truly yours,

William G. Dressel, Jr.
Executive Director


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