Use surplus funds to reduce taxes to $161 for owner assessed at township average of $322,000.
By: Scott Morgan
MILLSTONE The Township Committee last week adopted the 2002 municipal budget, cutting the proposed tax rate in half with the help of surplus funds.
This year’s budget is $5.93 million; last year spending plan was $6.22 million, although actual spending was $5.27 million. The new budget carries a tax rate of 5 cents per $100 of assessed valuation, down from the originally proposed 10.57-cent figure contained in the budget introduced in March.
As originally proposed, the budget would have meant a half-cent tax rate increase from last year’s adjusted rate of 10.09 cents per $100.
Under the recently completed property assessment, the owner of a house valued at the township average of $322,000 will pay $161 in municipal taxes this year. The original budget would have cost taxpayers $340.35 in municipal taxes.
The main reason for the drop is the use of township surplus money, which according to Committeeman John Pfefferkorn sits at about $6.9 million. According to budget figures, the township will reduce the property tax rate by using approximately $2.55 million from the surplus. The amount raised by taxation for municipal purposes is approximately $595,000.
The general operating budget is approximately $3.11 million.
Mr. Pfefferkorn, the only member of the committee to abstain from the vote, said that while he was glad to see his fellow committeeman "realizing they have been overtaxing our residents," he said the use of surplus to provide the tax reduction was a tactical error.
"(Committeeman Cory) Wingerter made a strategic mistake," Mr. Pfefferkorn said. "He pushed a major short-term tax cut that will result in a major negative cash flow impact."
Mr. Pfefferkorn also said he disagreed with an increase in overall spending.
"You can’t sustain real tax cuts unless you reduce spending or reduce capital outlays," he said.
Mr. Wingerter defended the use of surplus, saying the remainder of the committee as backed by input from township financial officials believes the use of surplus will not negatively affect the township’s financial health.
"With the combination of a generous municipal surplus, increased anticipated revenues and a much reviewed and tight 2002 municipal budget, Millstone Township is fiscally secure and healthy," he said.
Township Chief Financial Officer Joseph Monzo said he agreed with Mr. Wingerter’s statement. Mr. Monzo said he was confident that the level of surplus in Millstone’s coffers is sufficient to withstand the amount being used.
There had been concern among some township officials that a municipal tax rate below 10 cents per $100 of assessed valuation would negatively affect state aid revenues. Mr. Wingerter said he received word from the state that the 5-cent rate will not jeopardize Millstone’s state aid.