Provides counties discretion related to retirement of county debt service and amount that can be raised under property tax levy cap.

Counties gain more property tax flexibility

New Jersey counties gain more room under property tax limits through two changes. Lower debt payments no longer automatically lower a county’s maximum allowed tax levy. Counties can also add the larger of two unused tax allowances to the levy used in cap calculations. The three-year allowance is available in one of the next three years, provided the county received no waiver. The other allowance covers the gap between the county’s actual increase and 3.5%. It applies when the cost-of-living adjustment is 2.5% or less and the county’s increase is below 3.5%. This rule covers budget years starting January 1, 2005, or later, and requires approval by county resolution. That allowance is available in either of the next two years, with an add-back in the following year’s cap calculation. The law took effect April 11, 2024, and applies to budget years starting January 1, 2024, or later. These changes allow higher county property taxes than the prior rules, but do not require tax increases.