by Davy James, Staff Writer
The Township Council introduced a budget Tuesday that cuts spending but increases municipal taxes, though officials say the plan is expected to undergo numerous changes before being adopted.
The council also decided to leave the door open for a possible deferral of pension payments, which would save about $1.3 million from this year’s budget but lead to greater expenses in the future.
The proposed budget cuts spending by $1.5 million from last year’s $49.5 million spending plan. Overall, the proposed spending plan would be 3.4 percent less than last year, but there would a 4-cent tax increase per $100 of assessed valuation.
The council expects to adopt its budget sometime in May.
”This is just the start of the process,” said Township Manager Matthew Watkins. “There’s a lot of work to be done between now and the adoption of the budget.”
Mr. Watkins said homeowners could see an $87 increase in municipal taxes this year under the proposed budget. The owner of a home valued at the township average of $194,400 paid $1,215 in municipal taxes last year. But Mr. Watkins said the proposed budget may not be what is adopted by the council.
The township will receive about $6.3 million in state aid, $164,580 less than last year.
In addition, the township has less surplus available to use as revenue due to the economic downturn, which has caused the amount of new taxable property coming into the township to decline, according to Councilman Joseph Camarota. Last year, the township used $9 million of its total surplus, while this year, the township can only use $7 million.
The council voted to apply to the local finance board to defer a portion of its pension contribution to the police, fire and public employee retirement funds, but all five members expressed reluctance to do so. The council has the option of deferring up to 50 percent of this year’s pension contribution, about $1.3 million. The township then would have to pay that figure off over a 15-year span with interest beginning in 2012.
The pension deferral is included as a line item in the budget. If the council decides not to use the deferral, it will need to cut $1.3 million more in spending from the budget, said Mr. Camarota, who was the only council member to vote against introduction.
”(The pension deferral) doesn’t make sense, but it’s the only life preserver the state is giving us right now,” he said. “I don’t know if we’ll be able to come up with $1.3 million in cuts, and the last thing we want to do is have somebody lose their job. I’d like us to talk to the different unions and look at employee furloughs and other avenues outside the box to come up with the $1.3 million. Even though we’re applying for the deferral doesn’t mean we have to take the whole thing.”
The interest on the deferred pension would be about 8.5 percent and would add an estimated $90,000 per year on top of whatever the pension contribution would be for any of those years.
”We have a big decision to make over the next couple of weeks,” said Councilman Charles Carley. “(The pension deferral) gives us another tool in our box if we need to use it.”
The council can decide to make less than a 50 percent deferral or still can decide against using it at all. If it decides against the deferral, then $1.3 million would need to be cut from the budget, which could mean laying off between 20 to 30 municipal employees.
The council will begin meeting with different township departments to see if anything can be trimmed. Further discussion on the budget will resume Tuesday night.

