State lawmakers are considering a bill that would allow New Jersey towns and cities to exceed a cap on spending for some items as they grapple with rising costs and dwindling federal aid despite concerns such a move could spark higher property taxes in some places.

New Jersey state law requires that municipalities limit yearly spending increases to 2.5% or the federally determined cost-of-living adjustment, whichever is lower.

This proposal (S3380) would allow towns to exceed annual spending limits for fuel costs, expenses related to trash collection and recycling, and certain insurance costs. Get politics news like this right to your inbox with the N.J. Politics newsletter. Add your email below and hit “subscribe”