New Jersey lawmakers say the state's 2 percent cap on on future tax increases is too strict.

The state Assembly  may add matching funds to list of exemptions towns can use to raise revenue. 

The current 2 percent cap allows towns to exceed the cap only to raise revenue for pensions, health care, debt, and emergencies.

Assemblyman Gary Schaer said currently towns can't qualify for state or federal matching funds under the cap's restrictions. 

"We cannot hamstring local government from doing necessary things but they have their hands tied and vital considerations like police, like fire, like EMS etc. are being jeopardized right now."

Lori Buckelew with the New Jersey League of Municipalities said the new exemption would help local governments get the money they need.

"Currently when considering grants municipalities must ensure that the expenditure of the matching funds would not require the reduction of service or programs elsewhere. Such consideration could force local officials to pass up an opportunity to save taxpayers money in the long term because of a short-term need."

Assemblyman Anthony Bucco was among Republicans who voted against the
legislation.

"Anytime we begin to erode away that 2 percent property tax level, that's a problem for taxpayers."

The state Senate has not acted on the measure.