On June 29, 2010, Governor Chris Christie signed the Fiscal Year (FY) 2011 state budget into law.  The FY 2011 state budget, totaling $28.4 billion in state funds, closed an approximately $11 billion budget deficit through a reduction in state aid to school districts and municipalities and the one-year elimination of property tax rebates for all New Jersey residents.  The FY 2011 state budget, which took effect on July 1, 2010, spends approximately $700 million less than the FY 2010 state budget.

Governor Christie also called upon the Legislature to address the issue of property tax reform.  On July 1, 2010, a special session of the Legislature convened to consider Governor Christie's property tax reform package.  In his speech, the governor proposed a 2.5 percent cap on annual property tax increases by way of legislation as opposed to a constitutional amendment.  This would be an alternative to the 2.9 percent cap approved by the Legislature on June 28, 2010.  Hearings on the governor's proposal have begun and will proceed through the summer.

The New Jersey Legislature passed its own version - S-29 - of a property tax cap on June 28, 2010, which states that property taxes can not increase by more than 2.9 percent per year, with exceptions for certain items such as healthcare costs.  Under this proposal, voters would not be given the opportunity to approve property tax increases over 2.9 percent. Instead, this decision would be left up to local governments.