During a hearing this morning, the New Jersey Local Finance Board rejected Lakewood Township’s request for nearly $12.9 million in additional property tax revenue above the state’s statutory cap, TLS has learned, with board members raising concerns about the township’s recurring reliance on cap waivers and the sustainability of its spending.

The board voted 4-3 against Lakewood’s request for an appropriations cap waiver totaling $12.9 million. The request was intended to allow the township to raise and spend more property tax revenue than otherwise permitted under New Jersey’s municipal tax levy and appropriations limits.

Lakewood officials told the board that the township faced significant financial pressures after losing millions of dollars in state funding that had helped offset expenses in prior years.

A township official said Lakewood received an $8.3 million cap waiver in 2025, along with an $8 million public health priority funding grant. The combined $16.3 million in additional funding was not available to the township this year.

Despite the loss of that funding, the township said it had reduced appropriations by approximately $3.3 million while seeking the $12.9 million waiver.

One of the largest areas of concern for board members was Lakewood’s snow-removal spending during this the past winter’s snowstorms.

Township Administrator Pat Donnelly said the township spent approximately $8 million on snow removal following an unusually severe winter, noting that Lakewood maintains more than 120 lane miles of roads and removes snow from every municipal road under its responsibility.

Donnelly said the township relied heavily on contractors during the storms, some of which required operations to continue for more than a week. The cost also included salt, brine, calcium and other materials needed before, during and after the storms.

In a typical year, Donnelly said, Lakewood spends approximately $1 million to $2 million on snow removal.

The township also sought federal reimbursement for some of the storm-related expenses following the state of emergency declared by the governor, but those efforts were rejected by the Trump administration, which the state is appealing.

Lakewood officials and local lawmakers have also pointed to the township’s relatively low level of state municipal aid as a factor in its financial challenges.

The state’s latest spending plan provides $1 million in discretionary municipal aid for Lakewood Township. While the funding represents a restoration from the governor’s proposal, it is a sharp reduction from the previous two state budgets, which provided $8 million and $7 million, respectively.

The municipal aid has been championed in recent years by state Sen. Bob Singer, R-Lakewood, and Assemblyman Avi Schnall, D-Lakewood, whose 30th Legislative District includes Lakewood.

Singer and Schnall have argued that Lakewood’s rapid population growth has placed extraordinary demands on local infrastructure and municipal services while the state’s existing funding formulas have failed to keep pace.

Despite being one of New Jersey’s largest municipalities, Lakewood receives among the five lowest amounts of municipal aid per capita in the state, according to figures cited by local officials and lawmakers. The resulting funding gap has placed additional pressure on the township to finance essential services, including police, fire, public works and other municipal operations.

The state funding issue adds another dimension to Lakewood’s request for cap relief: Township officials argue that the municipality is being asked to provide services to a rapidly growing population while receiving comparatively little state assistance.

Board members also questioned Lakewood about its longer-term financial outlook.

Donnelly said the township has been under a hiring freeze for nearly a year and is generally not replacing retirees or making promotions unless necessary to maintain staffing levels, particularly in areas such as police and public works.

He said Lakewood has also begun preparing a potential layoff plan and is examining ways to reduce costs and potentially lower certain levels of service.

“We recognize that there’s areas that we just need to financially find a way to kind of stuff as much as we can inside this envelope,” Donnelly told the board.

Explaining why he was voting against the request, Board member Robert Jackson, who himself is a former Mayor of Montclair, said he understood the financial pressures facing Lakewood but expressed concern about continuing to approve large cap waivers.

“I think that an ongoing environment where they’re coming in for cap relief and also 17% tax increases is beyond unsustainable,” Jackson said.

Jackson said he could not support maintaining what he described as the status quo without a more significant change in how Lakewood addresses its finances.

Another board member, Ryan Cooper, noted that the board had considered approximately $39 million in cap-waiver requests from Lakewood over the previous three years, including the current request.

The Local Finance Board director acknowledged the financial challenges facing Lakewood while also questioning whether New Jersey’s existing cap laws remain workable for municipalities facing inflation and rising costs.

The director said the state’s 2% tax levy cap was designed for a different economic environment and that the board was discussing potential fundamental changes to the state’s cap laws with the state Department of Community Affairs commissioner and legislative leaders.

At the same time, the director expressed concerns about Lakewood’s use of surplus funds and said the township would need to develop a plan to replenish those funds to avoid facing an even larger financial problem in the following year.

The board ultimately voted on a motion to approve the $12,927,234.41 cap waiver. The motion failed 4-3.

The rejection leaves Lakewood facing additional pressure to balance its 2026 budget within the limits of New Jersey’s existing municipal finance rules.

The township’s 2026 budget process includes a public hearing scheduled for Sept. 3.