What is the maximum amount of time a municipality can be in deficit before corrective action is required under New Jersey law?

Under New Jersey law, a municipality must take corrective action if it has a deficit that persists for a period of three consecutive years. This rule is in place to ensure that municipalities maintain fiscal responsibility and address financial issues before they escalate. When a municipality experiences a deficit for this duration, it is required to develop and implement a corrective action plan to restore fiscal health and ensure continued compliance with established financial standards and regulations.

The three-year time frame serves as a critical threshold, prompting municipalities to evaluate their financial practices and make necessary adjustments to avoid prolonged financial distress. This focus on accountability helps municipalities manage their finances more effectively, ultimately benefiting the services they provide to their communities.