Auditor: Surplus almost dried up in Hightstown

An audit report presented to the Borough Council last week shows the borough’s surplus will only be about $11,000 at the end of 2002, which could mean higher taxes next year.

By: Scott Morgan
   HIGHTSTOWN — The borough received its annual audit results last week and was told that its surplus has just about run dry — a situation that could lead to a large tax increase next year for borough residents.
   According to the figures presented by the Mercadien Group, which prepared the audit, the borough had a surplus of $643,000 in 1997. By 2001, that figure had dropped to $156,665.20. Of that, $144,000 was used to supplement the budget in 2001.
   The surplus essentially is a failsafe, largely culled from water/sewer taxes, to help offset the municipal budget. But the recent decision by the Borough Council to rework water and sewer rates by altering base-usage rates and per-gallon fees (the first such rate hike in 11 years) means the borough will no longer be able to rely on its surplus to augment a sagging economy.
   Like now.
   Economic predictions for 2003 have been far from rosy. A number of recent news reports, including a just-published report by USA Today citing concerns of a "double dip" economy, point to more rocky times ahead. The term "double dip" refers to a recessive economy that shows signs of growth, then drops again before its full recovery.
   In the borough, which essentially is built to its maximum, leaving little room for new ratables, changes to the budget, regardless of source, are answerable in only two other ways — through state aid and tax increases. Though the borough receives a great deal of state aid, traditionally, there is no guarantee that it always will. Should state budgets tighten next year and aid funds dry up, the borough could be facing a double-digit tax hike to make up for the any surplus drops, Borough Council President Mike Vanderbeck said.
   Mr. Vanderbeck said there are plans in the works for increasing the number of ratables (most notably the planned senior housing community), but any money from those would not come for a couple of years.
   In the meantime, the money has to come from somewhere, and it won’t be from the water/sewer-driven surplus, which, according to both the audit report and Mr. Vanderbeck, is expected to be down to around $11,000 by next year.
   Still, Mr. Vanderbeck said the surplus is one part of an otherwise good overall audit. He said the borough has hit the point, however, at which it is starting to pay for its past budgetary mistakes — using too much of the surplus.