2 percent state cap on tax hikes is culprit; cuts looming
The township faces the possibility of having to make more than $500,000 in budget cuts to meet the 2 percent state-mandated cap on the 2011 municipal tax hike and the township manager has met twice with labor unions to discuss just how that might be accomplished.
”I’m not sure everybody is going to be prepared for what the results of a 2 percent cap are going to be,” Municipal Manager Richard Krawczun said.
The state Department of Community Affairs’ Division of Local Government Services has not yet issued a formula as to how a town must prepare its calculations to be in compliance with the new law, Mr. Krawczun said. The DCA is still working out the details of the 2 percent cap.
Meanwhile, Mr. Krawczun has met with representatives of the Communications Workers of America, Local 1032, which represents supervisors, and the American Federation of State Municipal and County Employees, Locals 2476 and 2257, which represent the blue collar and white collar employees, respectively. Their contracts expire in December 2013.
Mr. Krawczun also has met with the Fraternal Order of Police, Lodge 209, and the Firefighters Mutual Benevolent Association, Locals 96 and 396, which represent the career firefighters and emergency medical technicians, respectively. The FOP contract expires in 2012 and the FMBA contracts end in 2013.
The municipal manager said a preliminary analysis shows the need to cut more than $500,000 in spending to meet the 2 percent cap, and efforts are on-going to examine alternatives to reduce the gap. Asked about the possibility of layoffs or reductions in service, he replied that “it is premature to answer those questions at this time.”
”I explained our current position as best we know at this time (to the unions), and the anticipated level of budget appropriations that exceed the 2 percent tax levy cap. At this time, our dialogue is continuing,” Mr. Krawczun said.
”I am approaching this dialogue with the representatives from the various labor unions in the same manner as I would any negotiations. The particulars will be announced at the appropriate time,” he said, when pressed for details.
Mr. Krawczun said that any changes to the union contracts would have to be negotiated with the unions, because he cannot “unilaterally” make any modifications to the terms.
Looking ahead, Mr. Krawczun said reductions in spending would “most likely” result in changes in municipal operations that will be noticeable to residents. The mandatory 2 percent cap on municipal tax rate increases will require some appropriations to be permanently removed from the budget, he said.
There may be cuts in services, Mr. Krawczun said, but those cuts have not been identified yet. The administration is still working on it, he added.
The 2011 municipal budget is slated to be presented to Township Council at its Jan. 18 meeting, he said.
”We have less choice than we had previously,” he said. “We were consistently successful in having the budget come in under the (former) 4 percent limit.”