Measure Will Enable Libraries to Transfer Portion of Surplus to Municipality
A bill sponsored by Assembly members Joan M. Quigley and Vincent Prieto has been signed into law, enabling public libraries with healthy budget surpluses to aid municipalities that are starved for revenue in today’s ailing economy.
“Throughout New Jersey, many towns are barely staying afloat due to plunging revenues combined with drastic cuts in state aid,” said Quigley (D-Bergen/Hudson). “Meanwhile many libraries are carrying a sizeable surplus, some of which comes from the municipality to begin with. By allowing towns to tap into this surplus without affecting library operations, we can help provide some measure of property tax relief for our residents.”
“This measure is intended to deliver property tax relief by helping struggling municipalities remain under the new state-mandated two-percent tax levy cap,” said Prieto (D-Bergen/Hudson). “This law is crafted in a way that will ensure that libraries maintain enough money to operate while also maintaining the current funding formula.”
Under current law, a free municipal library may transfer any portion of its surplus over 125 percent of its current operating budget to the municipality upon approval by the State Librarian, excluding funds restricted for capital projects and grants. However, current budgeting standards recommend a goal of a 20 percent surplus of any entity’s operating budget, while most public bodies actually hold a surplus of 10 percent or lower.
The new law (A-2911) will require a free municipal library to transfer any budget surplus amount that exceeds 20 percent of its audited operating expenditures for the previous year to the municipality in which it resides, excluding funds designated for capital improvements or grants. Municipal libraries that are not in good financial standing would not be affected by this bill until such time as they have built a surplus in excess of 20 percent of their operating budget.