First Local Tax Rate Cut In Years In Proposed Township Budget
The $59.3 million budget introduced Feb. 28 by the Township Council carries something that hasn’t been seen in quite a while: a decrease in the local portion of the property tax rate.
The decrease is slight and varies depending upon whether a property has been reassessed in the last year, but it’s a decrease, nonetheless.
The proposed $59,306,412 spending plan, down nearly $182,000 from the 2016 budget, is powered by a $34,961,693 municipal tax levy, which remained flat from the 2016 budget.
The budget includes $6,195,594 in surplus funds, down nearly $186,000 from the amount used in last year’s budget.
The perfect storm of a decrease in appropriations, flat tax levy and increase in the township’s assessed property valuation – from $9,246,202,748 in 2016 to $9,511,604,960 this year – results in a local portion tax rate of 36.8 cents per $100 of assessed valuation, down 1 cent from the 2016 rate of 37.8 cents per $100 of valuation.
That translates to a $17.59 reduction in the municipal portion of property tax paid by the owner of a home assessed at the current township average of $318,035, from $1,187.96 to $1,170.37.
Slightly more than 64 percent of the township’s yearly revenue comes from taxes, Township manager Robert Vornlocker said in his budget message to the council.
The proposed budget “continues to demonstrate the Township’s prioritization of improved efficiency and effectiveness, careful spending, and also working towards providing increased services, responsiveness and convenience for our constituents,” Vornlocker said in his budget message.
The proposed budget also includes $1,580,628 to pay for capital projects, including $1,250,000 of the $2.5 million road resurfacing program, Vornlocker said.
The reduction in the municipal tax rate “has been achieved despite a flat projection of revenues and significant increases in group health insurance and pension costs,” Vornlocker said in his budget message.
Pension payments increased about $390,000, while heath care costs increased about $600,000, Vornlocker said after the meeting.
Vornlocker said the budget was kept manageable because large increases such as in pensions and health care were offset by a large number of small budget cuts.
Also helping was a flat salary account, which accounts for about 39 percent of the township’s yearly expenses, he said.
“We have turned the town around from 2009 until now,” Mayor Phil Kramer said. He said he uses 2009 as a benchmark because that was the year Democrats began winning council seats.
“I think the township council has done an amazing job of getting us into this shape,” he said. “It’s really the manager and the department heads and every employee we have, just keeping that dollar close to them, only asking for things they need.”
Kramer said towns are advised to keep about $18 million in reserve, but the township has $25 million in “the bank.”
“We have $25 million in the bank and we have a double A-plus rating,” he said.
He said the surplus that will be used for the 2017 budget will be replaced by the end of the year.
“We need to be very careful, things are good now, we have a great tax rating, we have a great Moody’s rating, we’re not raising taxes. This is not a time for council to say we have this money, let’s spend it,” he said. “I would also caution our bargaining units to not say were flush with money, let’s ask for more. We still owe it to the taxpayers to keep those taxes under control.”
“I recommended to the financial oversight committee and the committee took my recommendation and is recommending to council that we raise taxes o.o percent,” he said.
Kramer said that he originally ran for council “to help control taxes. I walked into an economic environment where we were scrambling to keep the township afloat and this is the first year I was able to do thing the thing I wanted to do.”
The council will hold a public hearing on the budget at its March 28 meeting.
Overall property taxes may still increase because the municipal property tax rate is only one component of a property owner’s overall tax rate. Also in the mix are tax levies from the school district, Somerset County and the fire districts.
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