New Jersey Division of Local Government Services Local Finance Notice 2023-19
Wielkotz & Company
February 28, 2024
Local Finance Notice 2023-19 Calendar Year 2024 Municipal & County Budget Cap Information
This Local Finance Notice addresses issues related to the CY 2024 Municipal and County Budgets, the 1977 and 2010 cap laws, and the Cost of Living Adjustment.
Cost of Living Cap Adjustment
- The annual COLA is based on the Implicit Price Deflator for State and Local Governments calculated by the U.S. Department of Commerce, Bureau of Economic Analysis. The automatic increase to the 1977 cap law base is 2.5%, except that the governing body may pass a COLA ordinance increasing the base by 3.5%.
- A municipality or county may increase the COLA percentage up to 3.5% by ordinance or resolution, or bank the difference between its final appropriation subject to the cap and 3.5% for up to two years.
Using the Allowable Percentage Increase
- A cap increase ordinance (resolution for counties) must be introduced, 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. The chief executive may veto the action.
Group Health Insurance Exclusion
- The 1977 cap law includes a cap exception for Group Health Insurance, and the increase for CY 2024 is 7.4%, so the increase will be 5.4% for the CY 2024 levy cap calculation.
- The Local Finance Board approved one-year cap exclusions for pension, garbage and trash removal, recycling, gasoline and diesel and worker’s compensation insurance in 2023.
Local Finance Notice 2023-19
Please follow the link below to read more about these items and guidance on how your local unit can implement them: https://www.nj.gov/dca/dlgs/lfns/2023-19.pdf
Contact Wielkotz & Company, LLC Today
For further information on Local Finance Notice 2023-19 and its implementation feel free to reach out to Steven Wielkotz at (973)-835-7900 ext. 201 or sdw@w-cpa.com.
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