BY BRYAN SABELLA
Staff Writer
METUCHEN — Although the municipal portion of tax bills has remained flat for three years, this year’s preliminary budget figures project a significant tax increase.
The Borough Council introduced the 2004 municipal budget at its meeting last week. The budget, a general appropriation of $12,241,374, represents an increase of just over $758,000. If adopted as is, it could lead to a 15-cent tax increase.
On a home with the borough’s average assessed value of $187,700, taxes would go up about $281. A 15-cent increase would bring the tax rate up to 74 cents per $100 of assessed property value when added to the 2003 municipal tax rate of 59 cents per $100 of assessed property value.
Mayor Ed O’Brien said he is "fairly sure we can bring the [tax increase] down," and noted that for the past four years, the borough has been able to pass budgets with no tax increases.
"It is a tentative budget, based on speculation," O’Brien said.
However, this year he’s not quite as optimistic as in previous years for a number of reasons.
O’Brien noted that state aid has been flat for three years.
"There is no indication from the governor that state aid to municipalities will increase," he said.
Another factor O’Brien cited is the cost of health insurance for borough employees, which has grown significantly. The budget has also taken a $35,000 hit from diminished returns on investments as interest rates have fallen, O’Brien said.
He said the borough has also been "absorbing the rate of inflation" as it applies to such matters as utilities and the fueling of town vehicles, which he estimated as a 10-percent increase.
Perhaps the biggest problem involves utilities surcharges, officials said.
The borough is currently operating at a $179,000 deficit with the Middlesex County Utilities Authority.
"Normally, we operate at a surplus of about $80,000," O’Brien said.
This year has seen an unusually high amount of rain and snowfall, and for an area with a high water table to begin with, the results have been less than ideal, according to officials.
"We’re having a problem of infiltration of water from storm sewers into sanitary sewers," in effect putting the borough in a position where "we’re cleaning clean water," Councilman Thomas M. Vahalla said at the meeting.
The problem is compounded, O’Brien said, by "A lot of illegal connections of sump pumps to sanitary sewers" as residents attempt to do things like clear water from basements.
The budget was introduced at the council’s first February meeting in order to comply with state regulations, officials said.
O’Brien said July would be the earliest date any version of the budget would be finalized.