Borough tax increase narrowed to 4 cents

But council warned of cutting too much.

By: Jennifer Potash
   Princeton Borough homeowners will likely face a 4-cent increase in their tax bills under the proposed $19.7 million municipal budget in the coming year — but the cost may be higher in terms of deferred capital projects.
   The Princeton Borough Council is expected to introduce the 2003 municipal budget, which includes a tax rate of 72 cents per $100 of assessed valuation, at its meeting tonight.
   The owner of a home assessed at the borough average of $345,000 would pay $2,484 in municipal property taxes. The new tax rate represents an increase of $138, or 5.9 percent, over the 2002 municipal budget.
   Princeton Borough Councilman Roger Martindell, who serves as chairman of the Finance Committee, said the borough will dip into some reserve funds to keep the tax rate stable this year. He added that all new capital projects will likely be put on indefinite hold.
   "We’re tapped out," he said. "The days of big, new capital projects are over."
   Next year, the borough expects to take an additional hit from large pension bills, he said.
   So new projects, such as a recreational facility, or capital items such as major new vehicles, will not proceed, he said.
   "This may be the only way to give the borough taxpayer relief," Mr. Martindell said.
   As a built-out municipality, the borough cannot turn to new housing or commercial development for additional tax revenue, he said.
   New open-space acquisitions could also be put on hold as the borough traditionally has supplemented the open-space tax with borough funds, Mr. Martindell said.
   The borough’s road repair program and maintenance of existing facilities will not be deferred, he said.
   Borough Administrator Robert Bruschi, who recommended a larger tax increase of about 6 cents, said using the surplus funds this year to keep the tax rate hike to 4 cents limits the borough’s options for dealing with future shortfalls.
   "My big concern with this is with no break with the economy in the foreseeable future and with the state hitting us with pension bills and with insurance costs continuing to skyrocket, it will be impossible not to raise taxes by a much greater amount," Mr. Bruschi said.
   Mr. Bruschi said he understands and is sympathetic to the goal of holding taxes down when many taxpayers are facing financial problems.
   Since the administration first proposed the budget earlier this year, about $120,000 in municipal spending has been eliminated. Early drafts of the budget suggested a 5- to 8-cent increase in the municipal tax rate.
   The largest increases in the 2003 budget stem from insurance costs and salary and wage increases, many the result of contracts with union personnel.
   The insurance costs, for health, liability and workers’ compensation, are going up by $540,000, Mr. Bruschi said.
   On the revenue side, the borough will receive no increase in state aid and had a drop in parking revenues due to the closure of the popular Park & Shop lot, first for remediation by Public Service Electric & Gas Co., then for the construction of the new parking garage.
   Raising parking meter rates is not an option as the Borough Council pledged not to revisit the rates until after the new downtown parking garage opens, officials said.
   Mr. Martindell said he expects the Borough Council to approve the budget in about a month.