Title
Dept/ Agency: Finance
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Alternate Method of Calculating the Reserve for Uncollected Taxes
Purpose: To Request the Consent of the Division of Local Government Services to Adjust the Amount of Reserve for Uncollected Taxes Required to be Included in the City Budget
Program Period: Budget Year 2026
Additional Information:
A certified copy of this Resolution must be submitted to the Division of Local Government Services.
body
WHEREAS, N.J.S.A. 40A:4-41(c)(2), enacted into law (P.L. 2010, c. 56), provides alternate methods of calculating the Reserve for Uncollected Taxes; and
WHEREAS, for any municipality in which tax appeal judgments have been awarded to property owners from action of the County Tax Board pursuant to R.S. 54:3-21 et seq., or the State Tax Court pursuant to R.S. 54:48-1 et seq., resulting in tax reductions in the preceding fiscal year, the Governing Body of the municipality, by a majority vote, may by resolution, elect to calculate the current year reserve for uncollected taxes by reducing the certified tax levy of the prior year by the amount of the tax levy adjustments resulting from those judgments, prior to the adoption of the annual budget pursuant to N.J.S.A. 40A:4-5; and
WHEREAS, the City of Newark’s Adjusted Tax Levy in 2025 was $521,287,013.56; and
WHEREAS, during 2025 the City of Newark’s Tax Levy was reduced by $1,541,970.76 in 2025 tax appeals; and
WHEREAS, the City of Newark has determined that it is advantageous for the City of Newark to utilize the method under N.J.S.A. 40A:4-41(c)(2), which allows the maximum percentage to be used for the reserve for uncollected taxes in the 2026 budget as 96.06%.
NOW, THEREFORE, BE IT RESOLVED by the Municipal Council of the City of Newark, New Jersey, that:
1. The Director of the Division of Local Government Services in the Department of Community Affairs, be and is hereby requested to give his/her written consent to allow the City of Newark to compute the Reserve for Uncollected Taxes, pursuant to the provisions of N.J.S.A. 40A:4-41(c)(2).
2. The City Clerk shall upload a certified copy of this Resolution on the FAST System for the Director of the Division of Local Government Services.
STATEMENT
This Resolution authorizes the Municipal Council, by a majority vote of the full membership, to approve the use of an alternate method of calculating the Reserve for Uncollected Taxes, which will be beneficial for the City.