The Elections Transparency Act, enacted in April 2023, introduced important changes to New Jersey campaign-finance and pay-to-play laws. And one perhaps overlooked provision of the ETA is now set to take effect on January 1.

Under the law, contribution limits for all candidates and committees will now be subject to inflation adjustments in odd-numbered years. This inflation adjustment is new for every recipient other than gubernatorial candidates. (Gubernatorial adjustments will continue on the regular four-year schedule.)

What this means is that, starting January 1, essentially all the contribution limits will go up. The following chart summarizes the new limits that apply to contributions made from individuals, corporations, unions, and associations:

Political party committees, PACs (CPCs), and legislative leadership committees that follow the calendar year as the reporting period will simply have a higher limit on January 1, 2025 when each contributor’s limits re-set to $0 anyway for the new calendar year. For political party committees with housekeeping accounts, those housekeeping accounts may in 2025 accept additional contributions of $39,500 per calendar year, an increase from the current level of $37,500 (by law, the limit for a housekeeping account is half of the limit for the general account).

For candidates, whose limits apply on a per-election basis, the increase will apply to the current or next election. For example, an Assembly candidate who is running in the 2025 primary will be able to accept an additional $300 from a contributor who had maxed out in 2024 once the increase goes into effect on January 1. (This means that candidates running in the 2025 primary election will be able to solicit again all contributors to reach the new maximum.) Then the new $5,500 limit will be in place from the start of the 2025 general election.

In addition, ELEC is applying inflation adjustments to 24/72 hour reporting and independent-expenditure reporting for spenders using their own funds (in 2025, the threshold will increase from $200 to $300 for both categories).

The new limits that will be in place in a few weeks highlight the importance for each individual, business, union, and political organization to keep accurate and complete records of their political contributions. Understanding election cycles, contribution dates, and now biennial shifts in contribution limits will make the difference between a legally permissible political contribution and one that exceeds legal limits.

Compliance Tip: Even though the general campaign-finance limits are increasing in January, these adjustments do NOT apply to the reportable threshold of $200 per reporting period. This means that contributors who wish to stay under the reportable threshold—which necessitates reporting of detailed contributor information on a recipient’s campaign-finance reports—must stay at $200 or less per election for a candidate and $200 or less per calendar year for a political party committee, PAC (CPC), or legislative leadership committee. This $200 threshold also has important implications for pay-to-play compliance for those business entities that hold or pursue New Jersey government contracts.

Avi D. Kelin is a founding partner of PEM Law LLP, and chairs the firm’s Political Law and Non-Profit Law practices. He helps businesses, organizations, individuals, and political organizations to influence policy while complying with the law.

This column is for educational and informational purposes only and is not intended and should not be construed as legal advice. It is recommended that readers not rely on this column, but that professional advice be sought for individual matters.