ROBBINSVILLE: Pension issue delays budget introduction

by Audrey Levine, The Packet Group
   ROBBINSVILLE — Newly approved legislation allowing deferrals of pension bill payments has led the township to push back its presentation of a 2009 budget until April 16.
   The state recently approved legislation to allow municipalities to participate in a reduced pension contribution program that will require payments of only half the costs for the Police and Fire Retirement System and the Public Employee Retirement System. The remainder of the costs can be paid back over a 15-year period, beginning in 2012, and with 10 percent interest added on each year.
   Township officials are working to do what they can to prevent participation in this program.
   ”Here the state is $40 billion underfunded, and they come up with a bill that says we don’t have to pay into the pension plans,” Mayor Dave Fried said at the March 26 Township Council. “I think this deferral is a really bad idea.”
   As for the local budget, Township Administrator Mary Caffrey said, on the spending side, it is ready to be presented to the public. With this new legislation, she said, the township is taking another look at its revenues to determine a way to avoid taking part in the deferral program.
   Ms. Caffrey said the township received a letter from the state March 23 detailing the pension deferral program. Now, she said, the municipality is hoping to create a budget that is far enough under cap to allow for the full payment of the pension costs.
   ”The state has said that if a municipality cannot make the pension payments and make cap, don’t come in for a cap waiver,” she said.
   Municipalities are limited by the state to maximum annual spending increases of 3.5 percent and maximum tax levy hikes of 4-percent.
   The main concern, Ms. Caffrey said, is that allowing for the pension deferrals to be paid beginning in 2012 would create a high tax increase that year for residents.
   ”We get no discretionary aid (from the state), so we will have to make it up in property taxes,” she said. “This is not an attractive option.”
   ”It will just create more debt for next year,” Mayor Fried said.
   Ms. Caffrey said the pension deferral would be more beneficial to towns with a source of revenue other than property tax, or that historically get the (discretionary) aid from the state.
   Instead, Ms. Caffrey said, the township’s first step is to look into its revenues, particularly through the courts, with a plan to appeal to the state Department of Community Affairs to be allowed to base its court revenue on 2007 figures instead of those from 2008.
   In 2008, she said, court revenue was down in many municipalities throughout the state as courts were required to reprocess several charges of driving while intoxicated in which fines already had been collected. Because of this, she said, the courts did not collect as much revenue as in years past.
   ”Because all courts took a hit from that, we want to petition the DCA to look at 2007 revenues instead,” she said.
   When the budget is introduced, Ms. Caffrey said, she is looking to present the Township Council with two separate options for voting. The first, she said, will show a budget under cap with the full pension payments. The other, also under the cap, will show an outline with the deferral as well as what the tax rate would be in 2012.
   ”I’m a big believer that the staff should put all the choices out there and let the governing body make the final decisions,” she said. “I believe we shouldn’t bind the hands of future government without taking some ownership ourselves.”
   In addition, Ms. Caffrey said the township is waiting to finish discussions with Hightstown, Allentown and other communities to determine how much state aid they are receiving and if they can continue to afford their interlocal agreements with the township.
   Robbinsville officials recently learned they would be getting $1.65 million in total state aid, a loss of $36,625 from the 2008 figure of $1.69 million.
   Most of this money, Ms. Caffrey said, comes from the state’s Energy Tax Receipts program, which is not considered a municipal aid program, but is actually funds generated from sales and taxes on energy or utility services.
   Despite the concerns, Ms. Caffrey said she is confident the township will be able to produce a budget that stays below the cap and includes full pension payments.
   ”Right now, we are trying to make sure we are comfortable with our revenue numbers,” she said. “We are trying to make sure we maximize our revenue numbers and get the spending down under cap.”