By Audrey Levine, The Packet Group
Audrey LevineStaff Writer
ROBBINSVILLE The Township Council is set to sink its teeth into a proposed $18.2 million 2009 municipal budget that carries a tax rate hike of about a penny.
With a recommendation not to take part in the state’s pension deferral plan, Mayor Dave Fried on April 16 offered a preview of the financial plan that would enable the township to make its full pension payments and still remain $300,000 below the 3.5 percent spending cap.
”These types of budget gimmicks (with the deferral plan) are how New Jersey got into the state we are in now,” he said. “I recommend we raise the tax rate by one penny and not take the deferral.”
The recommended budget includes a 3 percent increase in the tax rate, lifting it to about 37 cents per $100 of assessed property value. For a homeowner assessed at the latest average township assessment of $400,000, that translates into a municipal tax bill of $1,488, up $48 for a homeowner assessed at the same figure last year.
The budget itself represents about a 6-percent increase from the 2008 budget of $17.1 million.
The pension deferral plan would allow townships to pay half their pension costs this year and pay back the remaining half over a 15-year period, beginning in April 2012. In addition to that payment, however, Mayor Fried said Robbinsville would be required to pay 10 percent interest each year.
”We would wind up paying significantly more (than just paying full costs now),” he said. “There is no way I can recommend that, and I will ask the council to reject the deferral plan.”
No details on potential staff or service changes were discussed at the April 16 meeting. Township Administrator Mary Caffrey said there would be a presentation before the council of all the points of the budget at the April 23 meeting, which took place after the Messenger-Press deadline. Unfortunately, she said, April 22 was the deadline for applying for the deferral, and the administration wanted the council to be able to make its own decision about the plan.
”We think the council should have a choice on that,” she said.
Ms. Caffrey said during the April 16 meeting that a resolution had been prepared in advance if the council decided to move forward with taking the deferral plan, but most council members spoke out against it.
”I think we should take the responsible step and pay our bills when they are due,” said Councilman Rich Levesque. “Raising the tax rate one cent isn’t irresponsible.”
According to Mayor Fried, the township’s full pension payments total $842,454 with $223,087 earmarked for the Public Employee Retirement System and $619,367 for the Police and Fire Retirement System.
If the township entered into the deferral plan, it would pay $448,924.50 this year. However, Mayor Fried said, the cost of the interest payments alone in the deferral plan would be $462,891.
”Towns normally borrow for 2.5 to 3 percent interest,” he said. “With this, the state is asking for 10 percent.”
In answer to a resident’s question, Mayor Fried said the average township resident would see an increase of $82 in the property tax over the 15 years with the deferral plan, which is “double what we will pay now.”
”If we took the deferral, taxes would go down slightly (this year),” he said. “But it will cost 2 cents over the 15 years.”
Mr. Levesque later made a motion to move on from the discussion and refuse to take part in the deferral plan.
Councilwoman Sonja Walter objected to not having the information about each line item ready for the council members prior to the April 16 meeting, but did not object to refusing the deferral plan.
Audrey Levine can be reached at [email protected].

