State aid numbers are not expected to be released until at least March 22
By: Scott Morgan
On Monday afternoon, Gov. Jon Corzine delivered a forecast that was, from end to end, dreary. The state of New Jersey, to hear Gov. Corzine tell it, is in trouble. Four and a half billion dollars in debt, a $750 million annual growth in that deficit, a barrage of spending cuts and tax hikes almost certain to happen and all of it projected to continue next year and the year after that.
Even state Treasurer Brad Abelow conceded that in New Jersey, over the next few years, "We don’t have great choices."
Monday’s presentation at Rutgers University in New Brunswick, delivered by Gov. Corzine and the members of his cabinet charged with spelling out the state’s budget woes kicked off what has become a somber three-day tour of the state.
The intent of the governor’s road trip, which concludes in southern New Jersey Thursday, is to bring the realities of the state’s financial situation to the people; to let them know that things are tough all over and that it will take work (and, apparently, tough choices) to iron them out.
It will also take time, and that, for the vast majority of communities in the state, is a serious inconvenience. While state officials struggle for the best way to shape up a budget that, at best, minimizes damages, local municipal officials wait. Before local budgets can be offered and finalized, the state needs to not only work out its own problems, but deliver aid figures to towns that are unsure what help, if any, they are going to get.
State aid numbers are not expected to be released until at least March 22, which leaves municipal officials in a state of limbo.
As Florence Township Administrator Richard Brook said, most townships (and Florence is one of them) know their preliminary budget numbers. That, however, does little good right now.
"You want to know what all your numbers are going to be," Mr. Brook said. "You could introduce a budget, but I don’t like to do that until we know everything."
Bordentown City Mayor John W. Collom agrees.
"We can’t complete our budget until we know what (the state’s) going to give us," the mayor said. "Aid is critical to small towns like us."
While neither Mr. Brook nor Mayor Collom anticipates a cut in state aid from last year, neither expects anything more. Mayor Collom said he anticipates something fairly comparable to last year (nearly $580,000), but will, as usual, look to grants, which he said has helped the city immeasurably over the last few years.
For comparison, Florence received $1.8 million in state aid last year, almost to the penny what it received in 2004. Mr. Brook’s reaction in 2005 was about as resigned as it is this year to the simple facts of the current fiscal climate in New Jersey not surprised to see flat state aid.
Of all the factors that go into devising a municipal budget, there are a few that seem to be at the top of local officials’ lists for concern. In practical mathematical terms, officials often remark, flat state aid this year is, in effect, a decrease. The reasoning goes that as costs and demands go up annually (in the areas of salaries, benefits, insurance and, primarily, police pension contributions), flat state aid simply becomes less money for townships to work with.
One of the more pressing facets of the budget process for local officials is a line item known as reserve for uncollected taxes. Municipalities are responsible for paying all taxes to the state, including not just local purpose taxes, but county and school taxes as well.
In Springfield, the reserve for uncollected taxes has become the budget’s "biggest bullet," according to Deputy Mayor Denis McDaniel.
Springfield did not collect as much in local purpose tax payments in 2005 as it did in 2004, Mr. McDaniel said. That alone requires that the township’s 2006 budget reflect a larger amount to cover the problem, he said. Though township officials are not expected to introduce the budget until April, officials already are projecting a $370,000 line item in the reserve up $126,000 from last year.
"And," said Mr. McDaniel matter-of-factly, "there’s nothing we can do about it."
There is also nothing to do but wait. State aid will come, but not for a couple weeks and even then, Mr. McDaniel said, who knows what it will yield. Soberly, he assessed the amount of state money for Springfield this way "I would be delighted if we got the same as last year." For the record, that was $609,000.
Schools, of course, factor into the reserve too. Whether people pay their school taxes, the municipality still has to. The state, Mr. Brook reminds, does not care about the origin of its tax money so much as the fact that it’s paid.
Last year, Florence had a $487,000 reserve that may have to be increased this year, Mr. Brook said. But again no one will know whether that’s necessary until the state comes through with its own budget, already weeks behind schedule.
But school districts are holding their collective breath as well. Superintendents, such as Bordentown Regional’s John Polomano, say the state’s longer-than-usual development of its budget is understandable, but carries with it an inherent unfairness to school districts the timetable.
As Mr. Polomano explained, school budgets are due by March 30 and board elections the first time many people see district budgets are less than three weeks later on April 18. That, Mr. Polomano said, gives districts very little time to explain their budgets to a public that, traditionally, needs a lot of convincing.
"It’s an unfair time frame," he said, suggesting that if the state is taking longer to develop its budget (not to mention taking the time to make its case directly to the people), then schools and municipalities should be given more time as well. In particular, Mr. Polomano said, the April school board elections should be moved back to allow districts time to organize their approach to the budget.
"Nothing should be sacred about an April election date," he said. "If the governor’s given more time, then so should we. What’s fair for one is fair for the other."