Municipal officials ponder
impact of state aid freeze
Although Gov. James McGreevey’s announcement that there will be no increase in state aid this year may have less of an impact on municipal governments than on school districts, that isn’t stopping some municipal officials from being a little nervous as they prepare their 2002 budgets.
Most municipal officials contacted said that during the budget-making process they are going on the assumption that they will receive the same state aid in 2002 as they received in 2001. Some said there is an element of the unknown present until the governor unveils his 2002 budget.
There is a possibility that McGreevey will not unveil his first budget until as late as March 26.
While school district officials have said the lack of state aid figures is severely slowing down their budget-making process, most municipal officials said they are pretty much on schedule with their 2002 budgets.
Tom Antus, Freehold Township’s administrator, said the Township Committee will introduce its 2002 budget on Tuesday, even though state aid figures have not yet been announced by the governor’s office.
"We have prepared a preliminary budget based on what our state aid figures were last year," Antus said. "Although the governor’s announcement was somewhat ambiguous, we assume that we are going to get the same amount of state aid in 2002 as we did in 2001."
Antus said the preliminary municipal budget includes a tax rate increase this year.
The public hearing on the township’s budget is scheduled for March 26, when it may also be adopted, Antus said. Coinci-dentally, that could be the same day McGreevey unveils the state’s 2002 budget and announces state aid figures.
Antus said the committee will not necessarily have to adopt its budget on Match 26, if it does not get the state aid it expects.
"We have always been dedicated to not raising our taxes," Antus said, "but this year we’re not even getting living expense increases in our aid."
Freehold Township has the fourth lowest municipal tax rate in the Monmouth County — 21.6 cents per $100 of assessed valuation. Only Farmingdale, Millstone Township and Upper Freehold Township have lower municipal tax rates. None of those three towns has a police department
"We do have the lowest tax rate of any full-service municipality in the county," Antus said.
Jeff Filiatreault, Howell’s chief financial officer, said the governor’s announcement comes at a difficult time because the declining revenues are coming at a time when the township’s expenses are increasing.
"We have already had one budget workshop meeting with another scheduled," Filiatreault said. "The governor’s announcement hasn’t affected our budget-making process per se, but it has been a blow to everybody as we attempt to balance our budgets."
Filiatreault said Howell officials are also going on the presumption that the community will not get less state aid this year.
"Most of us are literally not expecting any less in state aid this year," Filiatreault said. "The loss of additional state aid will have a tax impact on us because with the decreasing revenue, we have to face increasing expenses. We have pay raises for our employees, insurance increases and we have costs related to security issues because of the Sept. 11 disaster in New York City. The loss of state aid is a bothersome problem for us because we have little with which to replace it."
Some communities, such as Freehold Borough, have found the impact of the potential loss in state aid to be minimal.
"We’re about 80 percent complete in preparing our budget," Mayor Michael Wilson said. "Even though we don’t expect to get additional state aid this year, we’re OK on this. We have increased our revenue base with the completion of several projects such as the rehabilitation of the rug mill building on Jackson Street and the new development on Mechanic Street between South and Hudson streets, which has increased our ratable base.
"We have also completed a tax settlement with Freehold Raceway, which has given us additional revenue," the mayor continued. "The borough expects to have a very minimal municipal tax rate increase this year."
Other municipal administrators have adopted a wait-and-see attitude concerning the governor’s state aid announcement.
"We have had no formal announcement as to what state aid we will get this year," Lakewood manager Frank Edwards said. "Until we do, I will have no comment on the matter."