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Jan 21

Division Issues Guidance on Levy Cap Referendums

Posted on January 21, 2022 at 11:35 AM by Legislative Staff

The Division of Local Government Services has issued Local Finance Notice 2022-01, providing specific instruction and direction to municipalities considering holding a public referendum on exceeding the 2% Levy Cap or the 2.5% Appropriation Cap. If your municipality is considering a public referendum, we suggest that you review this Local Finance Notice with your professional staff.  

The various deadlines for the referendum process are determined by the date the election is held. If the municipality has a Type II board of education, the election is held on April 19, regardless of when the school board elections are held. If the municipality holds a non-partisan election in May and has an upcoming election, then the election is held on May 10. If there is no upcoming non-partisan election then the referendum election is held on April 19. Referendums for State fiscal year municipalities will be at the November General Election. Please note that municipalities with a population under 500 can choose to have a vote by mail election pursuant to N.J.S.A. 19:62-1 et seq.

It is important to note that there are various deadlines for municipalities considering a levy cap referendum. The first deadline is the publication of a display advertisement announcing that a referendum may be held. The deadlines are February 22 for April levy elections and March 15 for May levy elections.

Throughout the process the governing body must take the following action:

  • Pass a resolution by simple majority authorizing a “Notice of Availability of Mail-In Ballots”. Due to time constraints, the Division of Local Government Services suggests that if the governing body is considering a public question but has not yet made, a final decision the notice should be published. The publication of the notice does not bind the municipality to hold an election and the amount of the referendum does not need to be included in the notice. 
  • Introduce the municipal budget no later than March 28 for the April vote and April 20 for the May vote. The budget must reflect the tax levy and provisions of a planned referendum.
  • Publication of the introduced budget must be no later than April 7 for the April vote and April 28 for the May vote.
  • Pass a resolution authorizing the referendum question no later than the close of business on March 28 for the April election and April 20 for the May election. All referendum questions and explanatory statements must be consistent with the model ordinance included in this local finance notice.  
  • Pass a resolution if the municipality has published the Notice of Availability of Mail-In Ballots but chooses not to have the referendum. This resolution must be given to the County Clerk no later than the close of business on March 28 for the April election and April 20 for the May election.
  • Submit a request for a narrative explanatory statement to the Director of the Division of Local Government Services by close of business on March 18 for the April election and April 8 for the May election. Please note that you can contact the Division either in writing or by conference call.
  • Adopt the final budget by May 20 for April election and June 3 for May election. 

The referendum must be approved by 50% plus one vote cast to pass otherwise the question fails. If the referendum fails the governing body has the flexibility to amend the budget to meet current needs provided that the governing body initially acted in good faith. It is recommended that the municipality should plan in advance what actions it will take if the referendum is defeated and be prepared to take immediate action to adopt a budget within the 2% levy cap.

Contact: Lori Buckelew, Deputy Executive Director,, 609-695-3481. ext. 112.