ASSEMBLY STATE AND LOCAL GOVERNMENT COMMITTEE
STATEMENT TO
ASSEMBLY, No. 5240
with committee amendments
STATE OF NEW JERSEY
DATED: JUNE 16, 2025
The Assembly State and Local Government Committee reports favorably and with committee amendments Assembly Bill No. 5240.
As amended, this bill makes various changes to local unit budget processes and related operations.
The bill extends statutory deadlines for:
(1) the mayor or municipal manager, as applicable, to submit a recommended budget to the council of a municipality from January 15 to February 28 of the calendar fiscal year;
(2) the governing body of a local unit to introduce and approve the annual budget from January 26 to March 31 for a county and from February 10 to March 31 for a municipality operating on a calendar fiscal year. The bill also provides that a governing body of any municipality or county may introduce and approve the annual budget at the next regularly scheduled meeting of the governing body after the dates specified in the statute;
(3) to adopt the annual budget from February 25 to April 30 for a county and from March 20 to April 30 for a municipality operating on a calendar fiscal year. The bill also provides that a governing body of any municipality or county may introduce and approve the annual budget at the next regularly scheduled meeting of the governing body after the dates specified in the statute;
(4) the annual audit of a municipality or county from six months to eight months after the close of the fiscal year; and
(5) the annual statement on the financial condition of the local unit from February 10 to March 10 for municipalities operating on a calendar fiscal year.
The bill also establishes a 90-day deadline and clarifies procedures to fill vacancies in the following roles with budget-related responsibilities: municipal chief financial officer, county chief financial officer, municipal tax collector, municipal clerk, and principal public works manager. In certain circumstances, the Director of the Division of Local Government Services (director) in the Department of Community Affairs would be permitted to extend the 90-day deadline.
Additionally, under current law, members of a local unit governing body are subject to a personal penalty of $25 for failure or refusal to comply with certain statutory responsibilities related to local unit budget processes and operation of a local unit. The bill would increase the personal penalty to $100 for these violations and establish a personal penalty of $100 for failure or refusal to comply with additional existing requirements.
For counties and municipalities operating on a calendar fiscal year, the bill also increases the permissible amount of a temporary budget, which is adopted in the first month of the fiscal year and in effect for approximately three months, from 26.25 percent to 35 percent of the previous year’s total appropriations.
Under current law, the governing body or chief executive officer of any municipality may request a review by the director of the behavior or practices of certain individuals serving the local unit in a professional capacity. The bill allows the director to initiate a review of the behavior or practices of the following: registered municipal clerk, certified tax collector, certified public works manager, and qualified purchasing agent.
Finally, the bill allows the director to authorize an extension of the statutory deadlines for municipalities to mail estimated property tax bills upon good cause shown and upon terms or conditions the directors deems reasonable.
The bill would be effective immediately and would apply to the next local fiscal year beginning after that date.
COMMITTEE AMENDMENTS:
The committee amended to make the bill effective immediately and to apply to the next local fiscal year beginning after that date. In its original form, the bill was instead to be effective on the first day of the 13th month next following enactment and applicable to the next local fiscal year beginning after that date.