LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

SENATE, No. 4845

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: DECEMBER 23, 2025

 

 

SUMMARY

 

Synopsis:

Concerns Municipal Stabilization and Recovery Act; extends for six years.

Type of Impact:

Multi-year indeterminate increase in State costs.

Agencies Affected:

Department of Community Affairs

 

 

Office of Legislative Services Estimate

Fiscal Impact

Until December 1, 2031

 

State Expenditure Increase

Indeterminate

 

 

 

 

·         The Office of Legislative Services (OLS) concludes that the State will incur additional indeterminate costs over a multi-year period related to its oversight functions under the Municipal Stabilization and Recovery Act because the bill extends the monitoring period to 15 years from nine years.  The only municipality subject to such oversight under the act is Atlantic City.

BILL DESCRIPTION

 

      The bill amends the Municipal Stabilization and Recovery Act to extend, by six years, the length of State monitoring to which a municipality determined by the Department of Community Affairs to be in need of stabilization and recovery is to be subject.  The bill also revises, expands, and establishes certain Local Finance Board related oversight powers under the act and provides that its provisions are retroactive to December 1, 2025.  The only municipality under State control pursuant to the act is Atlantic City.  On June 6, 2016, the department determined that Atlantic City constituted a municipality in need of stabilization and recovery.  This determination was based on a review of the city’s property tax ratable base and outstanding debt portfolio. Atlantic City’s proposed recovery plan was rejected by the department on November 1, 2016.  On November 9, 2016, the Local Finance Board adopted a resolution granting the Division of Local Government Services broad authority to manage Atlantic City’s municipal affairs.

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that the bill will result in additional indeterminate costs to the State over a multi-year period related to its oversight functions under the Municipal Stabilization and Recovery Act because the bill extends the monitoring period to 15 years from nine years and revises, expands, and establishes certain oversight powers.  To the extent that the State incurs any ongoing expenses related to the exercise of its authority over Atlantic City’s municipal governmental functions, these costs will continue for the remainder of the State monitoring period.  Because these costs will be incurred over a longer period of time, the State will experience an increase in expenditures.  Any increase in State costs will be temporally limited as the bill provides that the State may exercise its discretionary powers under the act for up to an additional six years.  Currently, Atlantic City is subject to the terms of the act until the first day of the 109th month following its adoption, which is until December 1, 2025.  This bill lengthens the State monitoring period for an additional six years, until December 1, 2031, and provides that its provisions are retroactive to December 1, 2025.

 

 

Section:

Local Government

Analyst:

Abigail Stoyer

Senior Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).