LAWRENCE: Budget review expected at council meeting

By Lea Kahn, Staff Writer
   Township Council is expected to begin its review of the proposed $42.3 million municipal budget for 2012 when it meets Tuesday at 6:30 p.m. at the Municipal Building.
   Municipal Manager Richard Krawczun unveiled the proposed spending plan to Township Council last month.
   The proposed 2012 budget would raise the municipal property tax rate by 5 cents — from 84 cents per $100 of assessed value to 89 cents. The owner of a house assessed at the township average of $160,282 would pay $1,431 in municipal property taxes, which is an $81 increase over the 2011 tax bill of $1,350.
   Although the proposed budget increases by 1.1 percent over the 2011 budget, Mr. Krawczun also recommended a referendum to increase the property tax rate for 2012. If the council approves a referendum question, it would be on the ballot in conjunction with the annual school board election in May.
   The need for a referendum to increase the municipal property tax rate, however, is unrelated to spending, Mr. Krawczun told Township Council at its Jan. 17 meeting.
   The issue, he said, is that to comply with the state-mandated 2-percent cap on the increase to the municipal property tax rate, it would be necessary to plug in $4.87 million in surplus funds into the 2012 budget as a source of revenue.
   But that would mean virtually wiping out the available surplus fund of $5.02 million, leaving a balance of $154,000 in surplus funds. The manager said it would not be possible to regenerate that amount of money to be included as a source of revenue in the 2013 budget. Money from the surplus fund is used as a source of revenue for the budget.
   The surplus fund is the result of excess anticipated revenues, which means more money was generated than expected. That excess could be the result of property owners’ payment of delinquent, or past-due, property taxes, as well as more money that was paid in fees or permits than expected.
   The budget surplus fund peaked at $9.5 million in 2008. It has been steadily declining because of the inability to regenerate the amount withdrawn from the account and used as a revenue source in the municipal budget.
   In addition to the budget surplus funds, other sources of revenue are miscellaneous revenues, receipts from delinquent — or past due — property taxes and current property taxes. Miscellaneous revenue is made up of state aid, grants, fees charged for various licenses and Municipal Court fines.
   Mr. Krawczun said the need to increase the municipal property tax rate is due to a decrease in the value of the property tax base because of successful property tax appeals. In the past five years, the total taxable value of properties in Lawrence has declined by $167.3 million — including a $38.3 million drop between 2011 and 2012.