Bill Text: NJ A1561 | 2024-2025 | Regular Session | Introduced
Bill Title: Requires any increase in local government costs for employee health care and prescription benefits coverage be offset by equivalent increase in municipal energy tax receipts property tax relief aid.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly State and Local Government Committee [A1561 Detail]
Download: New_Jersey-2024-A1561-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblywoman VICTORIA A. FLYNN
District 13 (Monmouth)
Assemblyman GERRY SCHARFENBERGER
District 13 (Monmouth)
Co-Sponsored by:
Assemblyman S.Kean
SYNOPSIS
Requires any increase in local government costs for employee health care and prescription benefits coverage be offset by equivalent increase in municipal energy tax receipts property tax relief aid.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning increases in municipal energy tax receipts property tax relief aid in certain instances, amending P.L.2007, c.62, and supplementing Title 40A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 10 of P.L.2007, c.62 (C.40A:4-45.45) is amended to read as follows:
10. a. (1) In the preparation of its budget the amount to be raised by taxation by a local unit shall not exceed, except as provided in paragraph (2) of this subsection, the sum of new ratables, the adjusted tax levy, and the total of waivers approved pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46); provided, however, that in the case of a county, the amount to be raised by taxation shall not exceed the amount permitted by section 4 of P.L.1976, c.68 (C.40A:4-45.4).
(2) A local unit that has not been granted approval for a waiver pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46), may add to its adjusted tax levy in any one of the next three succeeding years, the amount of the difference between the maximum allowable amount to be raised by taxation or county purposes tax, as applicable, for the current local budget year pursuant to paragraph (1) of this subsection and the actual amount to be raised by taxation or county purposes tax, as applicable, for the current local budget year.
b. The following exclusions shall be added to the calculation of the adjusted tax levy:
(1) increases in amounts required to be raised by taxation for capital expenditures, including debt service as defined by law;
(2) increases in pension contributions and accrued liability for pension contributions in excess of 2.0%;
(3) increases in health care costs equal to that portion of the actual increase in total health care costs for the budget year that is in excess of 2.0% of the total health care costs in the prior year, but is not in excess of the product of the total health care costs in the prior year and the average percentage increase of the State Health Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), as annually determined by the Division of Pensions and Benefits in the Department of the Treasury; and
(4) extraordinary costs incurred by a local unit directly related to a declared emergency, as defined by regulation promulgated by the Commissioner of the Department of Community Affairs, in consultation with the Commissioner of Education, as appropriate.
The provisions of paragraph (3) of this subsection shall not apply to a municipality which receives an increased amount of energy tax receipts property tax relief aid pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
If there are no exclusions, then the amount of the difference shall reduce the adjusted tax levy by that amount. Any cancelled or unexpended appropriation for any exclusion pursuant to this subsection or waiver pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46), also shall be deducted from the sum of the exclusions listed in this subsection or directly reduce the adjusted tax levy if there are no exclusions.
(cf: P.L.2010, c.44, s.9)
2. (New section) a. In the event that a municipality, due to an annual rate increase, is required to increase the amount it expends from the prior year to provide health care and prescription benefits coverage to its officers and employees, the State shall increase the amount of annual aid distributed to the municipality under the "Energy Tax Receipts Property Tax Relief Act," P.L.1997, c.167 (C.52:27D-438 et seq.) by the equivalent amount to offset the increase in the employee health care and prescription benefits coverage expenditures.
This section shall apply when the health care and prescription benefits are provided through self-insurance, the purchase of commercial insurance or reinsurance, an insurance fund or joint insurance fund, the "New Jersey State Health Benefits Program Act," P.L.1961, c.49 (C.52:14-17.25 et seq.), or in any other manner or any combination thereof.
b. The governing body of a municipality that is required to increase its expenditures to provide employee health care and prescription benefits coverage pursuant to subsection a. of this section shall submit the information concerning the amount of the annual increase to the Director of the Division of Local Government Services in the Department of Community Affairs in a manner and on such forms as determined by the director, pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill). Prior to submission, the information shall be certified by a business administrator or the chief financial officer.
3. (New section) The Director of the Division of Local Government Services in the Department of Community Affairs shall develop a form to be utilized by a municipal governing body to document any annual increases in expenditures the municipality incurs in the provision of health care and prescription benefits coverage to its officers and employees, pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
4. This act shall take effect immediately.
STATEMENT
This bill provides that, in the event that a municipality, due to an annual rate increase, is required to increase the amount it expends from the prior year to provide health care and prescription benefits coverage to its officers and employees, the State will increase the amount of annual aid distributed to the municipality under the "Energy Tax Receipts Property Tax Relief Act," P.L.1997, c.167 (C.52:27D-438 et seq.) by the equivalent amount to offset the increase in the employee health care and prescription benefits coverage expenditures.
The provisions of the bill apply when the health care and prescription benefits are provided through self-insurance, the purchase of commercial insurance or reinsurance, an insurance fund or joint insurance fund, the "New Jersey State Health Benefits Program Act," P.L.1961, c.49 (C.52:14-17.25 et seq.), or in any other manner or any combination thereof.
Under the bill, the governing body of a municipality that is required to increase its expenditures to provide employee health care and prescription benefits coverage would submit the information concerning the amount of the annual increase to the Director of the Division of Local Government Services in the Department of Community Affairs in a manner and on such forms as determined by the director. Prior to submission, the information is required to be certified by a business administrator or the chief financial officer.
The bill also provides that the exclusion of certain health care costs from the property tax levy calculation would not apply to a municipality which receives an increase in energy tax receipts property tax relief aid pursuant to the bill.
