Under the 2021-2023 state budget funding for the Expenditure Restraint (ERP) remains at the same level as in the past, $58 million annually.
A municipality qualifies for an ERP payment if it meets the following two conditions:
1. The municipal only property tax rate must be at least five mills.
2. The municipal general fund budget for the year before the payment has not increased over the prior year's budget by more than an inflation factor plus a valuation factor.The inflation factor equals the average annual percentage change in the U.S. consumer price index for all urban consumers as determined by the U. S. Department of Labor for the 12- month period from September 1 to August 31 prior to the year for which the municipal budget is determined. The valuation factor equals 60% of the percentage change in the municipality's equalized value due to net new construction (new improvements minus improvements removed), but no more than 2%.