By Nick Norlen, Staff Writer
Princeton Borough Council had its introduction to this year’s budget process Tuesday — a presentation marked by talk of “obstacles” and “hurdles” to keeping tax increases down while facing reductions in state aid and other revenue limits.
As presented Tuesday, the current version of the budget totals $25,236,185 — a 4.4-percent increase over last year’s total, according to Borough Administrator Bob Bruschi.
Mention of those challenges precipitated a discussion about potential revenue sources that the borough could pursue, including the possibility of collecting income from the longstanding discrepancy between the borough and township’s payment of joint capital expenses, as well as the two towns’ conflict over sewer connection fees.
Currently, the budget’s tax impact would be an increase of 6.5 percent, Mr. Bruschi said.
”We know we can drag that down,” Mr. Bruschi said. “(But) we have some other obstacles that we have to overcome before we can hone in on methods that we can break that number down.”
Despite the state-mandated 4-percent cap on municipal tax levies, Mr. Bruschi said that there are “certain add-ons that we’re allowed to calculate which would then allow us to go up 6.5 percent in the borough,” including increases in pensions and insurance.
But the borough is also facing reduced revenues, he said.
The borough didn’t see $300,000 in construction fees come in last year, resulting in what Mr. Bruschi called a “double impact” — the fact that the money isn’t in the borough’s surplus, and the fact that it can’t be anticipated in this year’s budget.
Moreover, the borough will likely see large cuts in state aid, including a $70,000 reduction in Homeland Security funding, a $66,800 cut in consolidated municipal property tax relief, and a $26,400 decrease in municipal property tax assistance.
But the current budget does meet all of the borough’s obligations, Mr. Bruschi said, noting that a majority of the municipal departments are maintaining their budget totals.
And there are some positives, including the additional $91,000 received from Princeton University last year, and increased parking revenue. In addition, the borough is anticipating increasing its construction fees — for the first time in more than 10 years — and its sewer rates, Mr. Bruschi said.
Still, “it’s not a good picture for us right now,” he said. “It’s been a real challenge to try to figure out how we’re going to be paying this when we’re really limited as to what our tax rate increase can be. From a sensitivity standpoint, we beg your indulgence in where we are with this, because we are behind where we normally are with budgeting.”
Though Mr. Bruschi said Thursday that the borough will be able to deal with this year’s cuts — mainly by using $1.7 million in surplus money — he said he wants to start addressing the challenges he expects in the coming years.
While discussing longer-term revenue possibilities Tuesday, Mayor Mildred Trotman noted that negotiations on Princeton University’s contribution to the borough were reopened last December for the coming year.
Councilman Roger Martindell then inquired about the status of the settling of outstanding joint capital expense payments, which he said amount to more than $2 million.
”I’m not saying we should collect it and use it to reduce taxes necessarily, but it is a significant revenue,” he said.
Mr. Bruschi said the two municipalities’ chief financial officers met last week to discuss the issue, on which “the majority of the reconciliation has taken place.”
He added, “We’ll owe money to the township, and they will owe money to the borough,” noting that the borough should expect a net income from the exchange some time this year. “While we can’t insert it into the budget, what we can do is use that in our decision-making as to how much surplus we want to use this year, how much we want to look at other revenues knowing that we have received whatever that check is.”
Mr. Bruschi also noted that the two CFOs are reviewing numbers pertaining to the sewer fee dispute — over whether the township inappropriately retained millions of dollars in joint sewer rehabilitation funds — and are scheduled to report on the situation at the next joint administration meeting.
