Gov. Murphy signs legislation authorizing municipalities and counties to issue coronavirus relief bonds
NEW JERSEY – Governor Murphy Monday signed legislation (A3791) which authorizes municipalities and counties to borrow funds to cover revenue shortfalls and expenditures caused by the COVID-19 pandemic, by issuing bonds and notes. The final legislation included improvements recommended by Governor Murphy in his prior conditional veto issued on July 30, 2020.
“The COVID-19 pandemic and the ensuing economic crisis has left no corner of our state untouched,” Murphy said. “In the absence of much-needed federal assistance, this legislation will provide an important tool to New Jersey’s municipalities and counties, allowing them to have access to the funds needed to continue serving residents.”
“Municipalities have significant fixed statutory expenses and provide essential services, which have increased as a result of the pandemic,” said Michael F. Cerra, Executive Director of the New Jersey State League of Municipalities. “Meanwhile local governments are experiencing significant declines in revenue during this pandemic and for the foreseeable future, most of which will not be recaptured. This new law will provide needed flexibility to maintain essential services, control property taxes and address this unprecedented financial distress. Our thanks to the Governor and all the legislative sponsors for partnering with the League and other interested stakeholders to provide this critical financial tool.”
In his conditional veto, Governor Murphy recommended that borrowing would be best accomplished through existing and well-established local budgetary and debt structures instead of a new, additional funding mechanism. By amending local borrowing laws, the final legislation allows counties and towns to issue five-year special emergency notes for a broad swath of COVID-19 related costs. The final legislation also expands the special emergency mechanism to permit adoption of a special emergency to address certified COVID-19 related deficits in operations.
The legislation will take effect immediately.