What actions are required if a municipality exceeds its tax levy limit?

When a municipality exceeds its tax levy limit, one of the critical actions that must be taken is adopting a resolution to seek approval from the Local Finance Board. This is necessary because the Local Finance Board has the authority to grant exceptions or approvals for municipalities that need to exceed their established tax levy limits under certain circumstances.

The tax levy limit is a safeguard intended to ensure fiscal responsibility and stability; however, there can be legitimate reasons for a municipality to exceed that limit, such as unexpected expenses or emergencies. By seeking approval from the Local Finance Board, the municipality ensures compliance with state regulations while also addressing its financial needs.

This option is aligned with the statutory requirements and procedures established in New Jersey law regarding municipal budgets and finances. Seeking this approval effectively provides the necessary oversight and allows the municipality to operate within its legal frameworks while managing financial constraints.

While some may consider reducing future budgets or cutting public services as potential options, these would not fulfill the immediate requirement mandated by state law concerning exceeding tax levy limits. The resolution to the Local Finance Board is the formal process that must be undertaken to address the situation legally and effectively.