Getting Municipal Budget Down to 2% Tax Increase Involves Debate

At the Township Committee's third and final special budget meeting on Saturday, Township Administrator Joseph Manning presented a total projected budget of $38,225,372.55 for 2012 that is actually $49,536.28 less than the 2011 budget.

The draft budget, however, calls for a tax levy increase of 5.6% due to the fact that although expenses have not gone up, other non-tax revenues have decreased. The Township Committee is faced with the need to either cut expenditures or raise revenues by $960,000 in order to not raise local taxes more than 2%.

Township elected officials discussed using additional surplus from two accounts plus just under half of the anticipated revenue from the sale of the former police station site at 125 Dunnell Road — a sale that is expected to be completed in May — in order to close the gap.

However, Manning and Town CFO Peter Fresulone argued against using the surplus. Last year, town leaders dipped deeply into surplus to create a budget at a . Fresulone said that repeatedly using surplus money to close budget gaps could cause Standard & Poors to lower the town's bond rating — making it more expensive for the town to borrow money in future (the town does not anticipate borrowing any money this year). The mayor pointed out that Fresulone's was hypothetical and much could happen to influence rates between now and the date of any bond sale.

Nonetheless, Manning argued that the Township Committee should consider using the banked levy cap it generated last year when it brought in that 0%-increase budget. Elected leaders balked at the suggestion because they said it would mean raising local taxes more than 2%.

Fresulone and Manning said that the use of surplus proposed by the Township Committee this year would leave both surplus accounts in roughly the same place as last year or "slightly better." However, Manning said, "We have to think ahead. We don't know about tax appeals this year."

Mayor Vic DeLuca and Deputy Mayor Kathy Leventhal voiced strong opinions that the tax levy for the budget should not increase beyond 2%. India Larrier and Marlon K. Brownlee were less convinced. Said Brownlee, "I don't want to use the banked cap, but pause at the idea of an impacted bond rating."

Committeeman Jerry Ryan was also conflicted: "If we are able to identify money and it's available, we should go to 2% and we should avoid dipping into the banked cap, but ... we may have no other choice."

While DeLuca did say that using the money from the sale of the police station site — a projected "one-time hit" of about $1 million — was not an ideal way to solve thorny budget issues, he tasked Manning with looking into how much of that money would be available and when for the town to apply to the budget.

DeLuca noted that another big one-time infusion was coming in the next few years with the potential sale and development of the post office property on Maplewood Avenue. He also noted that new taxes would be coming into the town in the next few years from residential developments by Petrucci and Elite properties.

The Township Committee expects to discuss the budget again at its regular meeting on Tuesday, March 6, and anticipates introducing the budget at the March 20 meeting.