By Lea Kahn, Staff Writer
Township Council has taken the first step although it is non-binding toward putting a referendum question on the ballot in April, asking for a 9-cent increase in the municipal property tax rate.
The council agreed Tuesday night to advertise the availability of absentee ballots for the referendum question, which would be put on the same ballot as the school district’s annual election and budget vote April 17.
The deadline to advertise the availability of absentee ballots is Feb. 22. Township Council’s next meeting is Feb. 21, Municipal Manager Richard Krawczun said, emphasizing that the step to advertise the absentee ballots does not mean a referendum will be held.
Depending on the fate of the referendum question if it is placed on the ballot residential households might have to pay directly for garbage collection, rather than have it included in their municipal property tax bill.
The 9-cent property tax rate increase would be in addition to the 5-cent property tax rate increase proposed by the $42.3 million 2012 municipal budget. The referendum question is needed to allow township officials to exceed the state-imposed 2-percent cap on the tax levy.
A 5-cent increase in the municipal property tax rate from 84 cents to 89 cents per $100 of assessed value means the owner of a house assessed at the township average of $160,282 would pay $1,431 in municipal property taxes, or $81 more than the 2011 tax bill.
The 9-cent cap increase means that property owner would pay $144 more in 2012, in addition to the $81 increase resulting from the 5-cent property tax rate hike. The total tax rate increase would be $225 on a house assessed at $160,282.
While overall spending in the 2012 municipal budget is proposed to increase by 1.14 percent from $41.8 million to $42.3 million the need for a referendum to increase the tax levy is unrelated to spending, Mr. Krawczun said.
The issue is that to comply with the 2-percent cap on the increase to the property tax rate, it would be necessary to plug in $4.87 million in surplus funds into the budget as a source of revenue. It would wipe out most of the available surplus fund of $5 million, leaving about $154,000 in surplus funds.
Mr. Krawczun said it would not be possible to “regenerate” that amount of money to be included as a source of revenue in the 2013 municipal budget. It might be possible to regenerate $2.6 million, but not the entire amount that is proposed to be used a revenue source for the 2012 budget.
The 9-cent property tax rate increase would generate $2.2 million.
Money from the surplus fund is considered a source of revenue for the budget. The surplus fund is the result of excess anticipated revenue, which means more money was raised than expected. It could be the result of property owners’ payment of past-due property taxes, as well as more money that was paid in fees or permits than anticipated.
Mr. Krawczun told Township Council that the proposed budget does not include layoffs, noting that since 2007, the number of municipal employees had dropped from 213 to 197. This includes the addition of five emergency medical technicians in 2009 to the existing staff of four EMTs. The township operates its own emergency medical service, instead of relying on an outside provider.
If voters approve the 9-cent tax rate increase, Mr. Krawczun said, Lawrence Township would continue to include municipal garbage collection in the budget. The proposed 2012 budget pegs the cost at $2.7 million, including pickup and disposal fees. If the voters reject the referendum question, then other options to collect garbage would have to be explored.
One option is to create a solid waste utility, he told Township Council. It would cost about $2.8 million to start it up, including staffing and administrative costs. Garbage would be collected from 8,371 households at a cost of $28 per month, for an annual cost of $336 per household.
”One significant reason that I brought it up now is that the contract for trash removal expires in November. We can renew it (for one month),” Mr. Krawczun said, adding that a new contract would be needed to take effect in January 2013.
Another option is to drop garbage collection altogether and let residents make their own arrangements for garbage collection, he said. The average monthly fee would be about $30, or $360 per year.
Councilman Michael Powers said that “what is most troubling” is the possibility of using up virtually all of the surplus fund. There would be little money left for emergencies, he said.
Councilman Greg Puliti and Councilwoman Cathleen Lewis said they would like to explore other options to plug in the hole in the budget. Mr. Puliti said there must be one or two other options to consider.
And when Mr. Krawczun asked Mr. Puliti if those options meant personnel, the councilman replied “yes.”

