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January 22, 2008

Budget Deadline Extensions and Budget Referendums




Dear Mayor:

The Division of Local Government Services has released Local Finance Notice 2008-2 that extends budget deadlines for CY 2008 budgets.  The Notice also contains basic information about appropriation and property tax levy referendums.

The Notice can be accessed at

Please share this information with appropriate staff in your municipality.

The changes modify the statutory dates for introduction and adoption.  They also extend the date for holding a budget cap referendum and modify the dates for actions related to the referendum.  For the first time the schedule includes provisions for the “early” and “late” Property Tax Levy Cap referendums.  The changes are shown below:

Introduction and Adoption of Budget

Statutory Date

Revised Date

Mayor/Council Faulkner Act Budget Transmission



Municipal Introduction and approval of budget



County Introduction and approval of budget






Municipal Adoption



County Adoption






Appropriation and Early Levy Cap Referendum Dates

Statutory Date

Revised Date

Introduction and approval of budget and authorization of appropriation cap and early levy cap referendum



Published notice of referendum (day after introduction)



Last date for budget publication (12 days prior to referendum)



Referendum date





Late Levy Cap Referendum Dates


Introduction and approval of budget

By 4/16

Adoption of resolution authorizing referendum for budgets advertised prior to 4/24

No later than 4/23

Last date for publishing notice of referendum, introduced budget or any budget amendment publication


Late Referendum Date


Notwithstanding these changes, a budget may be adopted anytime within 10 days of receiving the Director’s certification of approval of the budget.  The Division recognizes that despite the revised deadline, some municipalities may be unable to meet the introduction or adoption deadlines, either due to a decision to apply for Extraordinary Aid or local conditions.

In addition, the governing body may by resolution, adopted by February 29, 2008, increase its temporary budget appropriation to provide for the period between February 25 for counties, or March 20 for municipalities, and the extended adoption date of the 2008 budget.  If additional appropriations are needed prior to the adoption of the budget, the local unit may adopt an emergency temporary appropriation pursuant to N.J.S.A. 40A:4-20.

Budget Cap Referendums

The law establishing the Property Tax Levy Cap (“4 percent” cap) allows a municipality or county to ask the voters for permission to exceed the levy cap.  This referendum is in addition to the referendum required to exceed the traditional 2.5 percent (appropriation or budget) cap that takes place in March. 

The law requires approval of at least 60 percent of the voters that vote in a referendum for passage of a levy cap referendum question.  The levy cap law also provides two opportunities for levy cap referendums; referred to as “early” (March) and “late” (May), to reflect their relative position in budget adoption process.  The appropriation referendum and the early levy referendum take place on the same day.
A municipality can exceed the 2.5 percent limit by either using a cost of living adjustment (up to 3.5 percent) ordinance or an appropriation cap referendum.   A municipality cannot use both an ordinance and referendum nor may it adopt a COLA ordinance if a referendum fails. 

Initiating an appropriation or levy referendum (or both) process does not legally preclude a municipality from applying for Extraordinary Aid (EA).  Further, if a levy referendum is planned along with an EA application, note that late referendum date comes after submission of applications and before the expected award date for EA, thus precluding a referendum if EA is denied or is less than any prior year award.

The laws provide specific details for scheduling the referendum and ballot related issues.  The Director of Local Government Services has authority to reconcile the levy cap to the appropriation cap process.  A separate Local Finance Notice will be issued shortly to provide specific procedures and forms to be used for both referendums.



                                                                        Very truly yours,


                                                                        William G. Dressel, Jr.
                                       Executive Director





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