PLAINSBORO: Township eyes pension deferral in budget

By Kristine Snodgrass, Staff Writer
   PLAINSBORO — The Township Committee is considering using pension deferral in order to moderate the tax impact of a budget proposed to increase 5.7 percent over last year.
   The preliminary 2009 budget, as presented by Township Administrator Bob Sheehan at the committee meeting Wednesday night, totals nearly $22 million.
   The municipal tax rate is proposed to increase by 3.2 cents per $100 of assessed value, he said, which would bring the total municipal tax rate to 34.8 cents.
   For the average assessed home in the township, valued at $395,000, that would represent a $126 increase.
   Mr. Sheehan recommended the committee take advantage of the recently enacted pension deferral program, which would save the township nearly $550,000, he said, or 1.5 cents in the municipal tax rate.
   The pension deferral program, signed into law by the governor last week, allows towns and counties to defer half of their required payments into the public employees’ pension fund. The deferred amount would be paid back over 15 years with interest.
   In order to take advantage of the program, the committee must adopt a resolution that explains their inability to meet the state-mandated levy cap.
   The State Department of Community Affairs’ Local Finance Board must approve the resolution. The administration is scheduled to appear before the board May 13.
   Mayor Pete Cantu said although he did not originally support the program, he now believes it would benefit the township to participate.
   ”In today’s environment and climate, it may make sense to us,” he said.
   Mr. Sheehan also gave the committee an overview of revenues and expenditures in the preliminary budget.
   Employee expenses, including salary, wages, health care and pensions, account for 60 percent of the township’s expenditures, he said, and 57 percent of the increase amount.
   Though two positions were eliminated last year, Mr. Sheehan said he does not anticipated any will be lost this year. The budget assumes a police lieutenant position that is empty will be filled through promotion, he said.
   Revenues remained generally strong, he said, though they fell in several areas, including hotel taxes, which decreased by about $150,000.
   The township’s state aid also fell by $53,000 to under $2.1 million.
   However, the township’s revenue in construction fees rose $452,000 as a result of development.
   Three percent of the net operating budget will be retained as surplus, he said, as in years past. More than $3 million of existing surplus was used to moderate the tax levy.
   The budget also includes $1.5 million in anticipated construction costs for the township library planned to open this summer.
   The committee plans to introduce the 2009 budget at its April 22 meeting with the intent to adopt it May 27.