Public Spending, ECONOMIC OPPORTUNITY FOR ALL
NJ.com: N.J. may allow your town and county to borrow to avoid public worker layoffs and cuts to services
By Samantha Marcus
Now it may be local governments’ turn to borrow.
The Senate Budget and Appropriations Committee on Tuesday approved a bill allowing towns and counties to sell bonds backed by property taxes to help cover lost revenue from taxes and fees and unforeseen expenses related to the coronavirus.
The state Assembly passed the bill 57-20 with three abstentions in May.
Despite fairly stable May property tax collections, local government officials say they’re already hurting from lost parking, permitting, licensing and hotel occupancy fees and court fines. They’ve also warned they are bracing for bigger declines in August property tax collections, when escrow accounts may be running dry for homeowners who have skipped or missed mortgage payments.
“This is a priority for unprecedented times,” said Michael Cerra, executive director of the New Jersey League of Municipalities, said of the borrowing bill. “This is an unprecedented and swift loss of revenues with the inability to recoup those revenues.”
The bill (A3971) would allow counties and towns to borrow an amount equal to as much as 30% of the previous year’s budget with a repayment period of up to 10 years, though they could seek permission from the state to borrow more and with a longer repayment period.
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