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The original item was published from 3/28/2024 2:04:00 PM to 3/29/2025 12:00:02 AM.

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Budgeting

Posted on: March 28, 2024

[ARCHIVED] State FY 2025 Budget: Department of Community Affairs

Governor Murphy’s FY 2025 detailed budget recommendations for the Department of Community Affairs (DCA) total $1.071 billion, a 29.5% reduction from the SFY 24 adjusted appropriation of $1.519 billion. The SFY 2025 budget language continues the requirement for municipalities to file a Best Practices Inventory established by the Director of the Department of Local Government Services (DLGS).  For more on the Governor’s overall budget proposal please see our SFY 2025 Budget write up. 

Below is a review of DCA’s budget and impact on local governments.  

Municipal Aid: The Consolidated Municipal Property Tax Relief Aid (CMPTRA) and Energy Tax Receipts has a slight increase, moving from $1.447 billion to $1.454 billion, a growth of 0.5% or $7.2 million from the FY 2024 budget to the proposed FY 2025 budget. Transitional Aid to Localities increases from $111.9 million to $126.9 million, marking a 13.4% increase with an additional $15 million. The SFY 2025 budget language maintains the provisions of SFY 2024 budget, allowing the Director of DLGS to allocate funds for short term aid to municipalities facing finical distress from losing a major business, with the flexibility to support schools and counties.  

The Trenton Capital City Aid and Open Space Payments in Lieu of Taxes (PILOT) both maintain their funding levels at $10.0 million and $8.0 million, respectively, with no change from FY 2024. 

The Municipal Relief Fund, which was $150 million in FY24 has been eliminated.  The subtotal for Municipal Aid decreases by 7.6%, from $1.765 billion in FY 2024 to $1.63 billion in FY 2025, reflecting a reduction of $134.3 million. 

Grants: The Local Recreational Improvement Grants, which provides funding to local entities for public recreational facility upgrades, through a competitive process overseen by the Division of Local Government Services, experienced a cut, decreasing by 20.0% from $25 million to $20 million, a reduction of $5.0 million. 

The allocation for the Historic Trust Fund is set to experience a reduction from the previous year, with the proposed funding decreasing from $39.8 million to $39.4 million for the State Fiscal Year 2025. This fund is dedicated to supporting historic preservation projects. 

The Shared Services and School District Consolidation Study and Implementation Grants is also reduced by 20.0%, or a $1.5 reduction, from $7.5 million to $6 million, Regional School District Consolidation Feasibility Studies remain constant at $5 million.  

Property Tax Relief Programs: The ANCHOR Property Tax Relief Program has an increase from $2.257 billion to $2.279 billion, marking a 1% increase with an additional $22.0 million in funding for FY 2025. The Stay NJ Property Tax Credit Program  doubled from $100 million in FY2024 to $200 million proposed allocation for FY 2025. for FY 2025. 

The Senior and Disabled Citizens' Property Tax Freeze program also has an increase, from $181.8 million to $188.1 million, a 3.5% rise with $6.3 million more in funding. However, not all programs experienced growth; the Veterans' Property Tax Deductions decreased by 8.0%, or $2.8 million, from $35.2 million to $32.4 million. Similarly, the Senior and Disabled Citizens' Property Tax Deductions saw a decrease of 4.6%, or $300,000, going from $6.5 million to $6.2 million. 

The subtotal for Property Taxpayer Relief Programs increased by 4.9%, from $2.581 billion in FY 2024 to $2.706 billion in FY 2025, an addition of $125.2 million. The grand total for property tax relief slightly decreased by 0.9%, from $20.651 billion to $20.457 billion, marking a reduction of $194 million. 

Government Records Council: The Government Records Council is proposed to receive a flat allocation of $524,000 for SFY 2025. 

Department Objective: The Department of Community Affairs (DCA) aids cities and towns in adapting to necessary changes, vital for enhancing and maintaining quality of life. This includes offering administrative advice, financial aid, technical support, and various services to tackle persistent public concerns such as safety regulations, housing needs, urban planning and development, management of local government finances, and disaster preparedness and response. The Department of Community Affairs includes the Division of Local Government Services, The Division of Fire Safety, Division of Codes & Standards, the Division of Housing & Community Resources, Local Planning Services, Division of Disaster Recovery & Mitigation and Office of Information of Privacy. Also, under the umbrella of DCA is the Government Records Council, Urban Enterprise Zone Authority, New Jersey Historic Trust, NJ Housing & Mortgage Finance Agency, LUARCC, and NJ Redevelopment Authority.  

The League will continue to provide updates as the budget season progresses. 

Contact: Andrew LaFevre, Legislative Analyst, alafevre@njlm.org, 609-695-3481, x116.

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