Average taxpayer would continue to pay $700 a year in municipal taxes if budget is approved.
By: Cynthia Koons
WASHINGTON For the fourth consecutive year, the Washington Township Committee has proposed a municipal tax rate of 40 cents per $100 of assessed property value, but some committee members said this may be the last year without a hike.
At its March 27 meeting, the committee unveiled its proposed $8.95 million municipal budget, a 6.5 percent increase over last year’s $8.4 million spending plan.
Chief Financial Officer Karen Baldino said the committee was able to keep the tax rate steady despite the $500,000 increase in the budget because the new homes and businesses produced that much more tax revenue this year.
For a homeowner with a house assessed at the township average of $175,000, the municipal portion of the property tax bill will remain at $700 a year if the budget is approved.
Committeeman Dave Fried expressed concern that the committee was drawing too much from its surplus to finance its spending practices in order to keep taxes flat for residents. The proposed budget incorporates $1.9 million of surplus money. The entire surplus is more than $3 million.
"We’ve got to be really careful," Mr. Fried said. "All we’re doing is just setting ourselves up for the future."
The excess in the surplus account was generated by new housing and commercial development, Mr. Fried said. Because development will end when the town is built out, he said the committee cannot rely on this source of funding to keep the tax rate flat in the future.
"Because the town’s growing we have this nice little pot of surplus, but we used $1.9 million of it," Mr. Fried said. "Every year we’ve been fortunate because we have new homes and new businesses. After (Town Center and the Northeast Business Park) are finished, we really don’t have much in the town that’s going to be built."
Committeeman Vince Calcagno stressed the importance of keeping local taxes flat in light of the national economic recession.
"If it wasn’t for the dire economic situation that we’re in, we may have (raised taxes) a penny or so," Mr. Calcagno said. "If we can do it again, hold the tax rate steady, it’s going to be very unlikely that next year (the committee) can keep it flat."
Mayor Doug Tindall said the budgeting process was very involved and required all municipal departments to look for ways to cut their budgets.
"This budget is extremely tight," Mayor Tindall said. "Employees have sacrificed and everyone has cut their budget to the quick."
This kept the municipal tax rate flat, but Mayor Tindall said a flat tax is essentially a tax break for residents because it doesn’t account for inflation.
"You’re really getting a tax break of 2 percent from this community," he said, referring to inflation.
Mr. Fried said the committee cannot afford to keep the rate flat at the expense of the surplus, considering the growth of the township, and the arrival of new businesses, will eventually end.
"What we’re doing is using the surplus to lower the tax rate," he said. "My concern is we’re talking about increasing spending and the reality is, we can’t increase spending because we’re using surplus money to pay for that spending."
The spending increases in this year’s proposed budget come from an $113,000 increase in garbage collection and disposal costs and a $134,000 increase in municipal employees’ health benefits.
"The key for next year is we are going to have to reinvent the way we provide services in order to stop depending on this surplus," Mr. Fried said. "We’re completely dependent on this surplus."
Ms. Baldino said the committee does rely on commercial property tax revenues to finance the budget.
"We do anticipate certain ratables that we hope will put money back into surplus," she said. "You never do know for sure what may or may not come in as far as ratables go."
She said using surplus is a technique that most township governments employ in their budgeting process, yet she is not sure to what degree.
"I would imagine most towns do use some of their surplus," she said. "I think each town’s financial situation is different."
"We get a lot of surplus from ratables that are coming on line during the course of the year," she said. "When that stops, the additional surplus funds will stop as well. We’re trying to . . . manage our surplus this year so in years to come we won’t be in a bad position."
A public hearing on the proposed budget will be held Thursday, April 24, at 7:30 p.m. in the municipal building at a regular Township Committee meeting.

