Understanding Your Municipal Budget: Tips for NJ Residents
OSC answers 5 common questions about municipal budgets so that you can participate in the process.
If you want to understand and shape how your tax dollars are being spent, reading your local government’s budget is essential. Through the budgeting process, municipalities project revenue and expenditures and set priorities. The municipal budget is both a financial plan and a policy document, making it one of the most important documents prepared by your local government.
New Jersey residents have a right to participate in the budget process, and local governments have an obligation to be transparent about local finances.
How can you get a copy of your municipal budget, and what should you be looking at when you do?
Here, we answer five common questions.
How can I get a copy of the local government budget?
New Jersey law requires every municipality to post its budget to its website. Not only that, municipalities also are required to post the adopted budgets for the prior three years.
What is a user-friendly budget?
Since 2015, every New Jersey municipality has been required to file a user-friendly budget (UFB), a simplified version of the budget. The files also are published in Microsoft Excel, enabling easier access to the data. Additionally, in 2022, the Division of Local Government Services, part of the New Jersey Department of Community Affairs, launched the User Friendly Budget Database, which includes the UFBs prepared by municipalities.
It’s worth spending some time in this database, as it allows users to pull budget, staffing, financial, and debt information for municipalities into an interactive table form. There also is a graphic feature that allows metrics to be visualized over time. Users can also access summary data for municipalities, organized by year with each year in its own tab.
How can I be involved in the budgeting process?
Municipal officials prepare the proposed budget, but before the municipality’s governing body is able to vote on the proposed budget, there must be a public hearing in which local residents can ask questions, raise concerns, and make comments. If there are any proposed amendments, there will also need to be more public hearings. Some municipalities follow the state fiscal year, while others follow the calendar year.
I’ve heard about participatory budgeting. What is that?
Participatory budgeting is a process that allows community members to propose and vote on capital projects – such as new playground equipment in parks or bike lanes – that they want to see funded. Projects that receive the most votes are adopted into the budget. To enable residents to play a more active role in how resources are allocated, some towns including Jersey City, Freehold Borough, and Asbury Park have introduced participatory budgeting pilots or initiatives.
What should I be looking at in the user-friendly budget?
New Jersey requires municipalities to adopt balanced budgets. Some items to consider: Are recurring revenues – such as property taxes, state and federal aid, and licensing and permit fees – covering the recurring expenditures, such as personnel costs and supplies? Are there sudden hikes or reductions in costs? Are non-recurring revenues – such as tapping a fund balance – masking deficits and overspending? By asking these questions and examining the proposed budget, you should gain a better understanding of how public dollars are being managed.
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