Gov. Phil Murphy has signed legislation (A-3791) which authorizes New Jersey’s municipalities and counties to borrow funds to cover revenue shortfalls and expenditures caused by the COVID-19 pandemic, by issuing bonds and notes.
The final legislation included improvements recommended by Murphy in his prior conditional veto issued on July 30, according to a press release from the governor’s office.
“The COVID-19 pandemic and the ensuing economic crisis has left no corner of our state untouched,” Murphy said. “In the absence of much-needed federal assistance, this legislation will provide an important tool to New Jersey’s municipalities and counties, allowing them to have access to the funds needed to continue serving residents.”
“Municipalities have significant fixed statutory expenses and provide essential services, which have increased as a result of the pandemic,” said Michael F. Cerra, executive director of the New Jersey State League of Municipalities.
“Meanwhile local governments are experiencing significant declines in revenue during this pandemic and for the foreseeable future, most of which will not be recaptured.
“This new law will provide needed flexibility to maintain essential services, control property taxes and address this unprecedented financial distress.
“Our thanks to the Governor and all the legislative sponsors for partnering with the League and other interested stakeholders to provide this critical financial tool,” Cerra said.
“Municipalities and counties are experiencing revenue shortfalls and expense overruns due to battling COVID-19,” said Assembly Speaker Craig J. Coughlin (D-Middlesex).
“All available options, including the ability to borrow funds, must be on the table if we expect our local economies to recoup losses and strengthen post-pandemic,” Coughlin said.
“The public health and economic crises brought on by COVID-19 has turned our lives upside down and thrown government budgets around the state into deep uncertainty,” said Sen. Vin Gopal (D-Monmouth).
“This legislation will give our local and county governments an extra tool to help us weather this crisis with as minimal an impact as possible on vital services, programs and taxpayers,” Gopal said.
In his conditional veto, Murphy recommended that borrowing would be best accomplished through existing and well established local budgetary and debt structures instead of a new, additional funding mechanism, according to the press release.
By amending local borrowing laws, the final legislation allows counties and towns to issue five-year special emergency notes for a broad swath of COVID-19 related costs. The final legislation also expands the special emergency mechanism to permit adoption of a special emergency to address certified COVID-19 related deficits in operations, according to the press release.
The legislation will take effect immediately.
