Towns struggling despite more aid

State municipal aid figures are broken down for area towns.

By: Lauren Burgoon and Sarah Winkelman
   Last week the state announced municipal aid figures for 2004-05. Towns in The Messenger-Press coverage area all saw increases, many of them for the first time in years. The following is a breakdown of aid figures by municipality.
Washington
   Like most towns in the state, Washington’s state aid figures have remained mostly flat for the past few years. This year the township received $1,723,060, an increase of approximately 1.8 percent, or $30,018 over last year.
   Township Committeeman Mark Tobias, who is on the committee’s Budget Subcommittee, said the amount of aid the township received from the state is nowhere near enough to make a dent in its projected tax rate increase.
   Officials are grappling with a projected $1 million budget deficit, which could lead to cuts in municipal services. Residents could be looking at as much as an 11-cent tax rate increase as officials grapple with rising municipal costs.
   Committee members have been discussing potential tax rate increases ranging from 6 to 11 cents. Township officials recently told committee members and the public that the township is facing a projected $600,000 increase in expenses and a $400,000 drop in revenue unless changes are made to the tax rate and budget.
   The current tax rate is 40 cents per $100 of assessed value. Without budget cuts, the tax rate would increase more than 11 cents per $100 of assessed property value. That means that a resident with a house assessed at the township average of $167,000 could expect to pay $852 in municipal taxes.
   A 6-cent increase would mean $768 in taxes for the homeowner whose property is assessed at the $167,000 township average — an increase of $100 over last year’s tax bill.
   Although no personnel cuts have been agreed upon, the committee has been discussing reducing the Police Department by five officers, and cutting Public Works and Recreation staffing.
   "We need to make changes in the town," Mr. Tobias said Monday. "We need to follow through on the cuts in personnel we’ve talked about. I wasn’t expecting Washington Township to receive a substantial amount of aid anyway and it wouldn’t have swayed my decision on the cuts anyway."
   Committeeman Doug Tindall agreed that the amount of state aid the township received would barely make a dent in the township’s budget.
   "All government at all levels has to scale back a little bit and live in its means," he said Monday. "The only solution to our financial woes are to try to spend less money."
   He said state aid to the township has been almost flat for the last two years.
   "We have been getting very small increases that don’t amount to much," he said. "Without an increase each year we are actually getting less money then the year before when you take inflation into account."
   Mayor Vince Calcagno said he was pleased the state had decided to give the township an increase of any size.
   "It’s certainly good to see that we got additional aid this year, even if it was only $30,000 more," he said Monday. "We would have liked to have seen a larger increase to reflect our growth, but at least we got a little bit more money."
   He added that $30,000 equals approximately one third of 1 cent on the tax rate.
   "I would have liked to have seen an increase closer to 1 cent on our tax rate so we could keep taxes lower, but I know a lot of towns are in a similar situation," he said. "Growth issues are a problem, coupled with the rising cost of health care. It’s really a burden on the towns."
Millstone
   Millstone Township received $1,105,989 in state aid this year, an increase of $26,205 over last year.
   "I’ve got one thing to say to the officials in Trenton — you’ve got to be kidding me," Township Committeeman John Pfefferkorn said Monday in response to the amount of aid his township received from the state. Mr. Pfefferkorn is the committee’s finance liaison.
   "I pay a lot more taxes to the state then I get back to my township," he added.
   He added that the amount of aid would not help lower the tax rate in Millstone.
   "I didn’t expect a major increase, but our operating costs are going up faster then the residents can offset them and this is a big problem," he said. "Taxes — and I’m talking fire, municipal and school — are going to go up in the double digits this year and for people on a fixed income that spells disaster. People can’t afford to live here anymore."
   He went on to say that even if a resident received a 3 percent salary increase from his employer, it would not keep up with the tax rate increases in town.
   Mayor Nancy Grbelja said she was disappointed with the amount of aid Millstone received.
   "Anyone who looks at that number knows we can’t do much with $26,000," she said Monday. "It’s just not going to go very far."
   She said she was disappointed that the state had been "holding back" on aid to schools and municipalities for so long.
   "Towns in this state, whether it be for school or municipal aid, are just not getting the assistance they need from our officials in Trenton," she said.
   Townships around the state are beginning to look at their municipal budgets and preparing for the worst. Millstone has had two budget meetings so far and has begun finalizing the numbers. The township is hoping to have a projected tax rate by the beginning of April, Mayor Grbelja said.
   "It’s hard to say anything definite right now," Mr. Pfefferkorn said. "At this point our numbers are up. That concerns me because I am fiscally conservative."
   According to Mr. Pfefferkorn, two years ago the township decreased the tax rate from 10.1 cents per $100 of assessed property value to 5 cents. Last year the rate dropped again, from 5 cents to 3.5 cents per $100 of assessed value. Surplus funds were used to balance the budget.
   He said the township’s surplus funds have dropped in the past year — from $7.6 million to $6.4 million.
   "We don’t have enough money coming in to cover our operating costs so we have had to dip into our surplus over the years," he said. "That is a major issue for this town."
   He said capital improvement projects, such as road repavings, are in the works but cannot be completed with funding.
   "In my opinion there is no way we can hold the tax rate at 3.5 cents without dipping into the surplus yet again," Mr. Pfefferkorn said. "That is dangerous ground. What we need to do instead is sharpen our pencils and look at cutting expenses."
   He said it was too early to tell what the potential tax rate increase would be, but he said there would most likely be an increase.
   While other towns are thinking of cutting personnel to offset the rising tax rate, Millstone Township is looking to hire more people, according to Mr. Pfefferkorn.
   He said the Department of Public Works may hire anywhere from one to three people to shift the workload, although nothing has been finalized.
Plumsted
   Plumsted Township’s state aid has remained flat for the last two years, according to Mayor Ron Dancer. This year Plumsted received $666,757 in aid, an increase of 3.29 percent, which translates to an increase of $21,253 from last year.
   "We were promised tax relief but we’ve only been delivered grief," Mayor Dancer said Monday. "The aid is insufficient."
   He said in 1995, municipal aid to local governments was approximately $1.7 billion. For the proposed 2005 figures, a decade later, there is $1.8 billion in aid for the states 566 municipalities.
   In that same timeframe the state’s revenue rose from $15 billion to $26 billion — an increase of 73 percent — while aid to municipalities has only gone up 5 percent, according to Mayor Dancer.
   Plumsted has begun working on its budget and Mayor Dancer said he is hoping the keep the tax rate stable. Taxpayers have not seen an increase in their municipal tax rate for the past 15 years. That rate is 12 cents per $100 of assessed property value.
   "We’re going to make every effort to continue with a stable rate despite the state’s insufficient aid," he said.
   He also is hoping to receive funding from a new program called Taxpayers Heroes. Money from the $5 million program is available to each of the state’s municipalities to "reward towns that have held the line on taxes," he said.
   "Obviously Plumsted Township, in my opinion, should be eligible," Mayor Dancer said.
   The Township Committee will not introduce the budget until it knows if Plumsted will be receiving money under the program.
Upper Freehold
   The township’s aid went up about $12,000 from last year, making this year’s total aid $734,401. Chief Financial Operator Diane Kelly said the amount is not enough for the township.
   "The aid doesn’t add up to the pressures that Upper Freehold faces," she said. "Among those are a demand to create infrastructure and provide more services."
   In past years, Upper Freehold was one of the few area towns to see a decrease in aid. Aid increased by $2,000 for 2002-03 but fell back by the same amount the following year.
   Ms. Kelly said the township plans to introduce the budget on March 18. The public hearing is scheduled for April 22.
Allentown
   Allentown received $199,743 in state aid for 2004-2005, an increase of $5,960 — or 3 percent — from last year’s aid. Aid to the borough had remained flat for several years.
   Borough Financial Officer Robert Bennick said Allentown’s budget is still under discussion. He said it would be premature to talk about the budget until it is introduced.