Concerns certain motor vehicle related funding to certain municipalities.

A5347 FISCAL ESTIMATE

LEGISLATIVE FISCAL ESTIMATE

ASSEMBLY, No. 5347

STATE OF NEW JERSEY

222nd LEGISLATURE

DATED: JULY 2, 2026

SUMMARY

Synopsis:

Concerns certain motor vehicle related funding to certain
municipalities.

Type of Impact:

Potential annual revenue increase for City of Jersey City;
potential annual revenue shifts for City of Jersey City.

Agencies Affected:

City of Jersey City.

Office of
Legislative Services Estimate

Annual Fiscal Impact

�

Potential Local Revenue Increase

Less than $10
million

Potential Local Shifts in Use of Revenues

Indeterminate

�

The Office of Legislative Services (OLS) concludes that the bill
may result in an annual revenue increase of less than $10 million for the City
of Jersey City associated with the authority to impose, by ordinance, a tax of
up to five percent on the rental of motor vehicles occurring within the
municipality.�

�

The bill is also expected to result in shifts in the use of
certain municipal revenues within the City of Jersey City including collections
of the mass transit access parking tax and parking penalties.

BILL DESCRIPTION

���� The bill modifies the
municipal distribution requirements and rates for certain motor vehicle related
funding.� The provisions of the bill only
apply to a municipality with a
population of 200,000 or greater that experienced a population increase of more
than 15 percent between the 2010 and 2020 decennial censuses.� The OLS has
identified the only qualifying municipality to be the City of Jersey City.

���� The bill amends current
law to permit the City of Jersey City to collect a municipality-wide rental car
tax regardless of the presence of a major airport.� Currently this tax may only
be imposed on rental transactions that occur within a designated industrial
zone in a municipality with a population of over 100,000 where a major airport
is located.

���� The bill also amends
the mass transit access parking tax by permitting the City of Jersey City to
use these revenues for operating and administrative expenses related to the
facilitation of mass transit.� The bill also amends the Parking Offenses
Adjudication Act.� Currently, $2 of each parking penalty assessed, when a
failure to appear notice has been issued, is distributed to the municipal
court.� This bill changes this $2 amount to an allocation of 10 percent of each
penalty.�

FISCAL ANALYSIS

EXECUTIVE BRANCH

����� None received.

OFFICE OF LEGISLATIVE SERVICES

����� The OLS concludes that the bill may result in an annual
increase in revenue to the City of Jersey City associated with the authority to
impose, by ordinance, a tax of up to five percent on the rental of motor
vehicles occurring within the municipality.� The OLS is unable to estimate the
number of motor vehicle rental transactions that occur in the City of Jersey
City and the terms of such transactions, and is, therefore, unable to estimate
the increase in revenue the city may experience as a result of adopting an
ordinance imposing a municipality-wide tax on the rental of motor vehicles.�
However, the OLS notes that the City of Newark collected $10 million in taxes
on the rental of motor vehicles in 2024.� Newark�s collection of this tax is
expected to be greater than Jersey City�s due to the presence of Newark Liberty
International Airport.

����� The bill is also expected to result in shifts in the
use of certain municipal revenues within the City of Jersey City including
collections of the mass transit access parking tax and parking penalties.� The
bill increases the amount of a parking penalty for which a failure to appear
notice was issued that is to be designated to the municipal court for the costs
incurred in administering the Parking Offenses Adjudication Act.� Current law
provides that $2.00 of such penalty is to be designated for the court.� The
bill proposes to increase this amount to ten percent of the penalty assessed,
as applied to Jersey City.� The minimum penalty for a standard parking
violation in the City of Jersey City is $35.00.� At a minimum, the designation
of an applicable individual penalty would be $3.50.� While Jersey City
collected a total of $2.45 million in parking violation fees in 2024, the OLS
is unable to determine the number of violations for which a failure to appear
notice was issued, and therefore, for which a portion of the penalty was
designated for the municipal court.� Because of this, the OLS is unable to
estimate the extent of the revenue shift pursuant to this provision.� The bill
also permits the City of Jersey City to shift its use of mass transit access
parking tax collections from capital improvements of mass transit facilities,
with excess amounts for quality of life projects within the municipality, to
operating and administrative expenses related to the facilitation of mass
transit.� The City of Jersey City collected $10.09 million in mass transit
access parking tax in 2024.

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.).