The opinion of the court was delivered by: Per Curiam
On certification to the Superior Court, Appellate Division, whose opinion is reported at N.J. Super. (1997).
We affirm the judgment of the Appellate Division substantially for the reasons set forth in that court's opinion. ___ N.J. Super. ___ (1997). However, we conclude that prejudgment interest should not have been awarded. Because Jersey City is a governmental entity and interest is not provided for by statute, "particular circumspection" in the granting of prejudgment interest is required, and "a showing of overriding and compelling equitable reasons" is essential to justify the award. Board of Educ. v. Levitt, 197 N.J. Super. 239, 244 (App. Div. 1984). In our view, no aspect of Jersey City's conduct in imposing and collecting the payroll taxes at issue warrants the imposition of prejudgment interest.
JUSTICES HANDLER, POLLOCK, O'HERN and STEIN join in this opinion. JUSTICE GARIBALDI has filed a separate Dissenting opinion in which CHIEF JUSTICE PORITZ and JUSTICE COLEMAN join.
GARIBALDI, J., Dissenting in part, Concurring in part.
This appeal involves the validity of a payroll tax ordinance adopted by the City of Jersey City ("City") on December 6, 1995. More specifically, this case questions whether, under the referendum provisions of the Faulkner Act, N.J.S.A. 40:69A-184 to -196, a filed but insufficient referendum petition, which was never cured and ultimately withdrawn, delayed the effective date of that ordinance.
The majority affirms the Appellate Division and finds that the ordinance did not take effect until January 1996, after its statutory authorization had expired. See N.J.S.A. 40:48C-19 (1994), amended by N.J.S.A. 40:48C-19 (1996). Therefore, the majority holds the ordinance to be void and unenforceable. I believe that the insufficient petition suspended the collection of the tax, but did not change the effective date of the ordinance. As a result, I find that the ordinance took effect in December 1995, prior to the expiration of its statutory authority, and thus, the ordinance should be upheld.
The facts are undisputed. On December 6, 1995, the Municipal Council of the City adopted Jersey City Ordinance 95-117 ("Ordinance"). That Ordinance, known as the "Jersey City Payroll Tax of 1995" and titled the "Ordinance Supplementing Chapter 29 (Special Tax) of Jersey City Code," imposed a 1% tax on the payroll of every employer in the City. Ordinance, supra, § 29-1. The Ordinance was enacted pursuant to enabling legislation set forth in N.J.S.A. 40:48C-14 to -19. Specifically, N.J.S.A. 40:48C-15 provided that any municipality may by ordinance "impose and collect an employer payroll tax for general municipal purposes of the municipality at a rate of 1% of the employer's payroll." The enabling legislation also contained a sunset provision, which prohibited the City from collecting that tax for services performed on or after January 1, 1996. N.J.S.A. 40:48C-19 (1994), amended by N.J.S.A. 40:48C-19 (1996). The Ordinance was approved by the Mayor the next day, on December 7, 1995.
On December 26, 1995, a Committee of Petitioners, pursuant to N.J.S.A. 40:69A-185 of the Faulkner Act, submitted to the Jersey City Clerk ("Clerk") 525 referendum petitions protesting the Ordinance. To invoke the power of referendum, the Faulkner Act provides that a petition must be signed by "a number of the legal voters of the municipality equal in number to at least 15% of the total votes cast in the municipality at the last election at which members of the General Assembly were elected" and must be filed with the municipal clerk within twenty days of the final passage and approval of the ordinance. N.J.S.A. 40:69A-185. The Act then requires the municipal clerk to determine, within twenty more days, whether the petition is signed by a sufficient number of qualified voters and to certify the results of his or her examination to the municipal council at its next regular meeting. N.J.S.A. 40:60A-187. Pursuant to that statute, on January 16, 1996, the Clerk certified that the petitions protesting the Ordinance were insufficient and he notified the Committee of the same. The Committee was short by 869 valid signatures.
N.J.S.A. 40:69A-188 provides that an insufficient referendum petition may be amended by filing a supplementary petition within ten days after a notification of insufficiency has been served. Rather than amending the insufficient petition in this case, however, the Committee filed a letter with the Clerk withdrawing the petition. That letter, dated January 26, 1996, stated:
The undersigned Committee of the Petitioners, pursuant to N.J.S.A. 40:69A-191 do hereby withdraw the Petitions previously submitted requesting a Referendum on City Ordinance 95-117 known as the Jersey City Payroll Tax of 1995.
Peter Murphy, a member of the Committee of Petitioners, asserted that the petition was withdrawn because of the large costs that an election would impose on the City and on the supporters of the referendum petition. Murphy also stated that the Committee withdrew the petition because of its belief that the referendum "was moot at that point due to the expiration of the enabling legislation and failure of the state legislature to extend same."
Concluding that the Ordinance could be enforced because the Committee had withdrawn its petition, the Chief Financial Officer of the City sent to all affected employers a 1995 tax return and payroll tax booklet to be used with regard to the payment of the payroll tax for the fourth quarter of 1995. The letter accompanying the booklet and return, dated March 1, 1996, stated that the employers' payroll tax payment was due on or before April 1, 1996. The City also made available to employers an application to extend the time to file a return. The City then began to collect the tax for the last quarter of the 1995 fiscal year.
On March 25, 1996, plaintiffs, employers in Jersey City, filed a verified complaint in lieu of prerogative writs in the Superior Court, Law Division seeking an order that the Ordinance was invalid. Plaintiffs successfully moved for summary judgment declaring that the Ordinance did not take effect until after January 26, 1996, the date the petition was withdrawn, and was accordingly unenforceable under the sunset provision. See N.J.S.A. 40:48C-19 (1994), amended by N.J.S.A. 40:48C-19 (1996). The City appealed, and the Appellate Division affirmed the trial court's ruling that the Ordinance was invalid and unenforceable. We granted the City's petition for certification, 151 N.J. 75 (1997). The majority affirms the Appellate Division judgment for the reasons expressed in the opinion of the Appellate Division, reported at ___ N.J. Super. ___ (1993). I respectfully Dissent.
That the sunset provision in N.J.S.A. 40:48C-19 prohibited Jersey City from imposing a payroll tax on any services performed after January 1, 1996 is undisputed. N.J.S.A. 40:48C-19 (1994), amended by N.J.S.A. 40:48C-19 (1996). That provision was subsequently amended on June 17, 1996, one month after the trial court's decision and order, to extend the sunset provision to December 31, 1999. L. 1996, c. 33, § 1. However, that that amendment does not apply is also undisputed. The amendment excludes those municipalities that have not "within ...