Municipal services and jobs at risk.
By: John Tredrea
Hopewell Township is facing some tough choices for next year’s municipal budget, Deputy Mayor David Sandahl said Tuesday.
"Looking at the facts that are on the table right now, we will have to cut municipal services and employment from current levels to balance the budget in 2005," he said.
"We estimate that land use litigation could cost upwards of $1.5 million in 2005 and that contract costs will be in excess of the new state cap law. We held the budget to bare bones last year, but we face some tough choices in Hopewell Township."
State cap laws restrict the amount by which municipal governments can increase their annual budgets over that of the preceding year. If maintaining current levels of services and personnel puts the township over its cap for next year, the township has no realistic alternative to cutting the budget until it is under the cap, Mr. Sandahl said.
Like Mr. Sandahl, Mayor Vanessa Sandom, who somberly used the word "horrible" to describe the budgetary squeeze facing the township for 2005, said Wednesday that the $1.5 million estimate for land-use litigation looms particularly large. The number could go down significantly, however, if the Merrill Lynch’s lawsuit against the township is settled out of court. A public hearing on whether it should be settled out of court is scheduled for Oct. 20.
Asked what services the township might cut next year, or how many employees might be laid off, Mr. Sandahl, who is the Township Committee’s liaison to the Finance Committee of township government, replied that "it’s too early to say."
The Township Committee has not yet started its budget planning sessions for 2005. Negotiations between the committee and each department of township government, such as police and public works, are integral to those planning sessions.
Mr. Sandahl said the Township Committee could see the budget squeeze for 2005 "coming last year, when we limited almost all of the 2004 budget to 2003 spending levels (or less) and still had to increase taxes to cover legal costs and restore our mandated surplus. Our choices in 2005 will be much harder, with a new state control that sharply limits municipal spending while multi-year contract increases for unionized township employees push costs higher."
About 46 percent of the $15.7 million township budget for 2004 is funded by sources other than local property taxes, officials say. About one-third of this nonproperty tax money is state aid, one-third is municipal surplus, and one-third is made up of interest income, fees and grants.
"We have little control over these other sources of revenue, which are determined largely by other governmental agencies and the marketplace," said Elaine Borges, township chief financial officer and deputy administrator, Tuesday. "Most of the remaining budget revenue, about $9 million in 2004, comes from the local use portion of the property tax, which is the basis for most of our budget choices. We really don’t have any other significant sources of general revenue."
"State aid to municipalities has been flat in recent years, particularly for towns like Hopewell Township,"" Mr. Sandahl said. "Little relief is in sight, as the current state budget depends on a controversial use of bonds that received only the grudging approval of the State Supreme Court. Absent the new borrowing, early estimates indicate a state budget shortfall as high as $5 billion in 2005. So there is little chance of an increase in state aid for Hopewell Township."