Provides tax levy growth limitation adjustment for school districts experiencing reduction in State aid.

A1590

ASSEMBLY, No. 1590

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman SEAN T. KEAN

District 30 (Monmouth and Ocean)

SYNOPSIS

���� Provides tax levy growth limitation adjustment for
school districts experiencing reduction in State aid.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
concerning the tax levy growth limitation applicable to
school districts and amending P.L.2007, c.62.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 3 of P.L.2007,
c.62 (C.18A:7F-38) is amended to read as follows:

���� 3.��� a.� Notwithstanding the
provisions of any other law to the contrary, a school district shall not adopt
a budget pursuant to sections 5 and 6 of P.L.1996, c.138 (C.18A:7F-5 and
18A:7F-6) with an increase in its adjusted tax levy that exceeds, except as provided
in subsection e. of section 4 of P.L.2007, c.62 (C.18A:7F-39), the tax levy
growth limitation calculated as follows: the sum of the prebudget year adjusted
tax levy and the adjustment for increases in enrollment multiplied by 2.0
percent, and adjustments for an increase in health care costs, increases in
amounts for certain normal and accrued liability pension contributions set
forth in sections 1 and 2 of P.L.2009, c.19 amending section 24 of P.L.1954,
c.84 (C.43:15A-24) and section 15 of P.L.1944, c.255 (C.43:16A-15) for the year
set forth in those sections,
[
and,
]
in the case
of an SDA district as defined pursuant to section 3 of P.L.2000, c.72
(C.18A:7G-3), during the 2018-2019 through the 2024-2025 school years,
increases to raise a general fund tax levy to an amount that does not exceed
its local share
, and a reduction� is State school aid
.

���� b.��� (1) The allowable
adjustment for increases in enrollment authorized pursuant to subsection a. of
this section shall equal the per pupil prebudget year adjusted tax levy
multiplied by EP, where EP equals the sum of:

���� (a)�� 0.50 for each unit of
weighted resident enrollment that constitutes an increase from the prebudget
year over 1%, but not more than 2.5%;

���� (b)�� 0.75 for each unit of
weighted resident enrollment that constitutes an increase from the prebudget
year over 2.5%, but not more than 4%; and

���� (c)�� 1.00 for each unit of
weighted resident enrollment that constitutes an increase from the prebudget
year over 4%.

���� (2)�� A school district may
request approval from the commissioner to calculate EP equal to 1.00 for any
increase in weighted resident enrollment if it can demonstrate that the
calculation pursuant to paragraph (1) of this subsection would result in an
average class size that exceeds 10% above the facilities efficiency standards
established pursuant to P.L.2000, c.72 (C.18A:7G-1 et al.).

���� c.���� (Deleted by amendment,
P.L.2010, c.44)

���� d.��� (1) The allowable
adjustment for increases in health care costs authorized pursuant to subsection
a. of this section shall equal that portion of the actual increase in total
health care costs for the budget year, less any withdrawals from the current
expense emergency reserve account for increases in total health care costs,
that exceeds 2.0 percent of the total health care costs in the prebudget year,
but that is not in excess of the product of the total health care costs in the
prebudget year multiplied by the average percentage increase of the State
Health Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), as annually
determined by the Division of Pensions and Benefits in the Department of the
Treasury.

���� (2)�� The allowable adjustment
for increases in the amount of normal and accrued liability pension
contributions authorized pursuant to subsection a. of this section shall equal
that portion of the actual increase in total normal and accrued liability
pension contributions for the budget year that exceeds 2.0 percent of the total
normal and accrued liability pension contributions in the prebudget year.

���� (3)�� In the case of an SDA
district, as defined pursuant to section 3 of P.L.2000, c.72 (C.18A:7G-3), in
which the prebudget year adjusted tax levy is less than the school district's
prebudget year local share as calculated pursuant to section 10 of P.L.2007,
c.260 (C.18A:7F-52), the allowable adjustment for increases to raise a tax levy
that does not exceed the school district's local share shall equal the
difference between the prebudget year adjusted tax levy and the prebudget year
local share.

����
(4)�� The allowable
adjustment for a reduction in State school aid shall equal the decrease in the
school district�s State aid, other than debt service aid and preschool
education aid, relative to the prebudget year.

���� e.���� (Deleted by amendment,
P.L.2010, c.44)

���� f.���� The adjusted tax levy
shall be increased or decreased accordingly whenever the responsibility and
associated cost of a school district activity is transferred to another school
district or governmental entity.

(cf: P.L.2018, c.67, s.6)

���� 2.��� This act shall take
effect immediately.

STATEMENT

���� Current law limits the amount
by which a school district may annually increase its general fund tax levy
without voter approval.� Specifically, the tax levy may not increase by more
than two percent, plus adjustments for enrollment growth and increases in
health care costs and pension contributions that exceed two percent.� This bill
provides an additional adjustment to the tax levy growth limitation.� The
adjustment would be equal to the school district�s decrease in State school aid
relative to the prior year.