Mayoral candidate calls for 12.1 cut in WW tax rate
Kristine SnodgrassStaff Writer
WEST WINDSOR — Council President Charlie Morgan, a candidate for mayor, is calling for a 12.1 percent tax reduction in the township’s 2009 municipal budget through use of surplus funds.
In a statement released this week, he said he cannot support the 5.4 percent tax increase that was proposed by the administration last month.
”We should reduce the tax rate 12.1 percent to 27.1 cents… That would be a 4-cent decrease that would roll back our taxes to the 27-cent 2006 rate,” he said.
The township administration proposed a $36.4 million operating budget, attributing the increase in the tax rate to the decline in the township’s tax base as a result of the struggling economy. The 2.7 percent increase in the budget is the lowest increase in 15 years, according to a letter from Mayor Shing-Fu Hsueh to the council.
The tax rate under the budget proposed by the administration is 33.1 cents per $100 of valuation, an increase of 1.7 cents over 2008.
”The mayor’s proposal would increase our taxes 22.6 percent since 2006,” Mr. Morgan said. “I voted against the tax increase a year ago, and I am going to vote against this tax increase.”
The administration’s budget includes $4.2 million in surplus, which is consistent with the level of surplus funds used to support the previous two years’ operating budgets, which is “reflective of our long-term financial plan,” according to the mayor’s letter.
However, Mr. Morgan suggests part of this is used as tax relief, even if it costs the township its AAA bond rating from the Standard & Poor’s rating agency, which it received in 2007.
West Windsor is among a handful of state municipalities who have received the rating, which means it is among the best quality, most reliable borrowers.
It has allowed the township to receive lower interest rates on the sale of the township’s debt in the form of municipal bonds. After receiving the rating, the township replaced about $26 million in bonds, allowing it to save $800,000 through better interest rates.
However, Mr. Morgan said the township’s surplus, which is part of the criteria for the rating, is better applied towards lowering the tax rate. The cost of maintaining this level of surplus each year outweighs the tax benefits of the rating, he said.
”We should return that $2.45 million of excessive surplus right now as immediate tax relief to West Windsor taxpayers,” he said.
Township administrator Christopher Marion said the staff is looking at Mr. Morgan’s analysis.
”The staff is looking at any and all suggestions by council members, and we’ll have our reactions and recommendations for May 4,” he said, referring to the council’s next agenda session.
The recommendation goes against the advice of township Chief Financial Officer Joanne Louth, who told council last week that the use of more surplus funds only defers a tax increase. And under the property tax levy cap, the funds may never be recovered and could result in the loss of municipal services, she said.
She also pointed out the term “surplus” is synonymous with “fund balance,” which is the amount the township has on hand to pay bills, and it is not necessarily excess funds.
Ms. Louth referred to several publications, which recommended municipal surplus be at or higher than the level in the administration’s proposed budget.
Introduction of the budget is scheduled for May 18 with a presentation and public hearing before the council votes on the budget’s adoption June 22.
ksnodgrass
@centraljersey.com

