Two More Municipalities Stabilize their Budgets and Leave Transitional Aid Program

TRENTON, NJ – New Jersey Department of Community Affairs Commissioner (DCA) Richard E. Constable, III today announced the 2012 Transitional Aid awards for five municipalities operating on a calendar year budget: Maurice River, Harrison, Asbury Park, Plumsted and Penns Grove. The Transitional Aid to Localities program was created in 2010 as part of Governor Christie’s overall reform effort to increase the efficiency, effectiveness and accountability of local governments statewide. Municipalities could apply for the aid if they demonstrated severe structural financial problems. Applicants had to agree to certain State oversight and reporting requirements in order to receive state aid dollars.

“My Administration is committed to assisting municipalities restore their fiscal integrity and self-sufficiency by partnering with them to implement responsible budgeting and spending practices,” said Governor Chris Christie. “The fact that two more municipalities have stabilized their budgets and successfully left the Transitional Aid program is evidence that our approach is working and that more municipalities around the state are implementing the necessary reforms to stand on their own. This year’s awards will provide five municipalities with the tools, assistance, and continued oversight they need to deliver a more efficient and accountable government for their taxpayers.”

The Transitional Aid to Localities Program was created two years ago with the requirement that the aid would only be temporary – used by the municipality during its transition from financial hardship to financial independence. Municipalities receiving Transitional Aid must submit a plan for becoming self-sufficient within four years. As a result, the program will be reduced as required reforms are put in place.

The program – which replaced the Extraordinary Aid, Special Municipal Aid and Capital Cities Aid programs of the years prior to the Christie Administration – places stringent requirements on aid recipients, which must sign a Memorandum of Understanding (MOU) agreeing to State oversight, reform and reporting requirements. Under the MOU, the DCA allocates 75 percent of a municipality’s awarded funds upon signing the memorandum. The balance is payable later in the calendar year, provided the requirements of the MOU are complied with and reforms implemented.

“Municipalities that receive Transitional Aid are accountable for the taxpayer funds they receive,” said Commissioner Constable. “It is important to understand that this aid is temporary and that there will be oversight and accountability requirements. The Division of Local Government Services is here to offer its expertise and technical advice to those municipalities that need it.”

Among other measures, the MOU limits non-essential expenditures, contracting and personnel actions; requires DCA approval for new hires and professional contracts; freezes promotions and transfers involving salary increases unless required by contractual obligations; prohibits funds for entertainment and most educational expenses; and requires discussions with DCA staff at least once per quarter to review the budget and fiscal progress.

A list of the 2012 calendar year applicants, their requested amounts, and aid awards can be viewed at on the DCA website.

All calendar year municipalities, which number approximately 535, were permitted to apply for this aid by February 29. Of those, 8 municipalities submitted an application. Prior Transitional Aid recipients, Chesilhurst and Prospect Park successfully “graduated” from the program last year and thus, did not have to apply this year.

The application process was competitive and individual meetings with applicants were held during which their needs and the steps they were taking to reduce their reliance on Transitional Aid were scrutinized. Municipalities were required to take steps that would have a tax impact on an average assessed home of at least $250 before being eligible to apply for funds. Application decisions were based on consideration of fiscal difficulties, stated need, actions to reduce costs, and past compliance under the Transitional Aid Program.

The Transitional Aid program is implemented through the Division of Local Government Services which works with local governments throughout the state to ensure their fiscal integrity and to support their efforts to comply with state laws and regulations. 

2012 Transitional Aid Awards for Calendar Year Budget Municipalities




Maurice River






Asbury Park






Penns Grove