By Lauren Otis, Staff Writer
Lauren OtisStaff Writer
That many hotels and other businesses use a so-called Princeton address and ZIP code while residing outside town lines may be considered a nuisance by some, but the practice has now hit Princeton Borough where it hurts, in the pocketbook.
On top of an already bleak budgetary picture for 2009, the borough just learned that the state has been overpaying it for its share of a hotel tax and now stands to lose $380,000 in annual revenue, Borough Administrator Robert Bruschi told Borough Council at its meeting Tuesday night. Apparently, the state had been giving the borough two hotels that use Princeton addresses and ZIP codes, but are based outside Princeton, Mr. Bruschi said.
The news that the state will withhold $380,000 annually going forward — paying the borough around $200,000 instead of upwards of $500,000 for its share of the hotel tax — will further darken the borough’s financial outlook, increasing the budget gap that must be filled in 2009 to $890,000, Mr. Bruschi said.
Mr. Bruschi made his remarks as part of a presentation during a specially scheduled council discussion on the 2009 budget.
Mr. Bruschi said the borough faces a budget shortfall of $1.3 million for 2009 and has already identified potential savings due to staff reductions of $340,000 and other expense cuts of $450,000, leaving a gap of $510,000 not including the added loss of $380,000 in hotel tax income. The seven percent hotel occupancy tax is levied on the basis of occupancy with revenue remitted to jurisdictions where the hotels are based. The Nassau Inn is the only hotel currently in operation in the borough (the Peacock Inn is closed during renovations).
”That is revenue we will not receive in 2008 and cannot expect going forward. So that is a pretty big hit for us,” Mr. Bruschi said.
Mr. Bruschi acknowledged that with only the Nassau Inn operating in the borough, officials had a suspicion the hotel tax remittances it was receiving were high, but “there is not reconciliation from the state of New Jersey,” so matching remittances to hotels is impossible.
Mr. Bruschi said he had approached each of the borough’s collective bargaining groups — the superior officers association, sergeants unit, and rank and file association, units of the Policemen’s Benevolent Association, and the Communications Workers of America and the Teamsters — about renegotiating current agreements. The response? “I’m trying to be kind here,” he said, “but there is a reluctance to renegotiate any existing agreements.”
Further staff reductions must be identified, Mr. Bruschi said, including police, dispatch, administrative and public works positions. He listed elimination of the Shade Tree Commission and eliminating funding for the environmental commission as possibilities. Mr. Bruschi also urged council to meet with Princeton Township Committee members to go over joint agency issues and possible savings and obligations there.
At the meeting Borough Council approved reducing garbage removal to once a week and implementing a benefit buyout option for employees that would jointly save $175,000 annually according to Mr. Bruschi.
At the meeting, the borough’s opting out of its participation in the joint Princeton Human Services Commission — proposed by Mr. Bruschi previously in order to generate approximately $100,000 in annual savings — was vocally opposed by both those who work at the organization and benefit from it.
Given the current economic slump, doing away with human services offerings, including the Crosstown senior transportation service, local welfare, civil rights and youth services, “would be a real hardship to the portions of this community that are unheard of,” said Cynthia Mendez, Human Services Commission executive director.
”The question is whether a community, particularly this community, wants to abandon the poorest among us,” said Claire Jacobus, a Human Services Commission board member.
”If it wasn’t for human services I’d probably be on my couch playing video games or something else unproductive,” said Alex Moise, 14, a Princeton High School student.
Councilman Robert Goldfarb said the decision was not over whether the human services organization was doing worthwhile work. “If the Human Services Commission hadn’t been doing useful things we wouldn’t have been funding it all these years,” he said. He added, however, that in the current economic climate its work is not “central to the government’s function.”
Mr. Bruschi said the goal was not to eliminate the services, but to transfer them to other local and regional entities.
Ms. Mendez said that the services her organization provides to Princeton’s Latino community, including help filling out paperwork, registering children for school, dealing with landlord tenant issues and legal referrals, would not and could not be duplicated by another organization.
Borough Council agreed to not make an immediate decision on whether to opt out of the Human Services Commission.
Councilman Roger Martindell noted that the real budgetary issue the borough faces is revenues, not expenditures. “If and when we have a tax increase … my suggestion is we should think of other revenue sources,” at the same time residents will be asked to pay more, Mr. Martindell said. He said increasing parking fees was one option.
Mr. Goldfarb said the borough could likely find savings if it hired a staff attorney to handle routine contractual and legal matters currently handled by Borough Attorney Karen Cayci, a partner with the Princeton law firm Herbert, Van Ness, Cayci & Goodell.
The borough currently pays around $200,000 annually for legal services, and “you could get a staff attorney to do 95 percent of the work that Karen does, for less money,” Mr. Goldfarb said.
Princeton Avenue resident Mark Alexandridis said council members should spend more time looking for savings in departments with a large share of the municipal budget, such as the police department, rather than those with little impact such as the Shade Tree Commission.
”Someone needs to justify why there are so many police, because I don’t see all that much crime out there,” Mr. Alexandridis said.
Mayor Trotman said the Borough Council will be to discuss savings in the police department, among other subjects, next month.
