Proposal has 11-cent tax hike

Hightstown Borough Council’s initial budget increases taxes yet cuts spending.

By: David Pescatore
   HIGHTSTOWN — The Borough Council on Tuesday discussed a preliminary 2004 municipal budget that would include an 11-cent tax rate increase.
   Although the borough would spend almost $600,000 less than last year, the $4.6 million plan would require more from taxpayers, largely due to the loss of surplus revenue from the water/sewer budget.
   Borough Administrator Candace Gallagher said that the lack of a water/sewer surplus, resulting in large part from the November closure of the Minute Maid plant, would cost the town $202,000. The proposed tax increase would generate an additional $237,000 in revenue.
   If adopted, an increase of 11 cents per $100 of assessed property value would raise the municipal tax rate to $1.15, costing the average taxpayer an additional $132.
   "This is just a starting point," Ms. Gallagher said. "Now, we go back to department heads and make more cuts."
   Ms. Gallagher also noted that the current version of the budget does not assume any state extraordinary aid. The borough received $25,000 from the state last year, but had been awarded $150,000 each of the two prior years.
   She said that she is hoping to receive more than last year’s sum.
   "We have extraordinary circumstances with Minute Maid closing," Ms. Gallagher said.
   The proposed municipal budget shows reductions in the operating costs of most borough departments. Aside from the loss of water revenue, large increases are expected in the cost of salaries, insurance and police and fire pensions.
   Ms. Gallagher said that increases in insurance and pensions account for 3.5 cents of the tax rate hike.
   Increases in water/sewer fees also are likely as the borough faces an $87,610 shortfall in that budget, which is separate from the municipal budget.
   Chief Financial Officer George Lang said that the shortfall could be covered by raising the quarterly charges of $19 and $34 for water and sewer, respectively, or by raising usage charges. The borough currently charges $1.85 per 750 gallons of water drawn by a household and $3.85 for the same amount sent back through the sewers.
   A third option, presented by Mr. Lang, would be to draw money from the municipal budget to cover anticipated shortages in the water budget.
   Mayor Bob Patten said that shortfalls in the water/sewer budget would be a temporary hardship for the borough.
   "We have the active-adult community (Enchantment) coming with 78 residences, the mill property will be developed in the next couple of years, and the Minute Maid property (will be used again). There will be an increase in water consumption," he said.
   Before rates are raised, Ms. Gallagher said, the borough would investigate selling water to surrounding municipalities or even bottling it for retail sale.
   She said that by the time the budget is finalized, the tax increase should be smaller.
   "At this time last year, we were looking at a 30-cent increase. We ended up at 6 cents," Ms. Gallagher said, adding that the reduction would not be as dramatic this year.
   "We are not going out and buying new chandeliers," Mayor Patten said. "We are trying to reduce expenditures without reducing services, laying people off, or having meetings by candlelight."
   The council will continue discussing the budget at a special meeting at 7 p.m. Wednesday, Feb. 18, at Borough Hall.