PLUMSTED: Municipal budget would raise average tax bill $75

Town introduces budget with cap; seeks $359,529 in state aid

By Joanne Degnan, Managing Editor
   PLUMSTED — The Township Committee has introduced its 2012 municipal budget, which has a projected 2-cent increase in the tax rate that works out to about $75 a year more in taxes for the average assessed home.
   The $3.1 million spending plan, which is within cap, was introduced during a special Saturday meeting of the governing body. In a related action, the Township Committee also voted unanimously to submit an application to the state Department of Community Affairs requesting $359,529 in transitional aid.
   The transitional aid program gives state grants to municipalities experiencing temporary fiscal problems, but recipients must agree to state oversight and reporting requirements. Mayor Dave Leutwyler and his fellow committee members said they were not worried about the strings attached to the grant.
   ”We’re consistent with all of the Best Practices already,” Deputy Mayor Eric Sorchik said, referring to a DCA program checklist aimed at making towns reduce costs, operate more efficiently and demonstrate greater accountability.
   Township Administrator Ron Dancer said the Plumsted municipal tax rate would rise from 13 cents per $100 in assessed value to 15 cents under the budget as introduced. This means the municipal portion of property taxes would rise from $483 to $558 a year for a home assessed at the Plumsted Township average of $371,800.
   The 15-cent tax rate assumes the municipality is awarded the $359,529 transitional aid, Mr. Dancer said. The township should know within two weeks if it has been granted all, part or none of the aid, Mr. Dancer said.
   The 2012 municipal budget totals $3,147,486 and is $13,266 higher than last year’s budget. The largest single spending increase is for the 12-member Police Department, which will get $51,421 more than last year. However, cuts in other areas of the municipal budget largely have offset the higher police spending, making the overall increase in the entire municipal budget less than one half of 1 percent.
   Mr. Dancer, who does not take a salary or benefits as township administrator, said Plumsted has only five full-time employees, excluding police officers, down from 16 full-time employees several years ago. The township is spending $195,0082 less in municipal salaries (including police officers) than it was in 2009.
   Total municipal operating expenses for 2012 are $1,178,746, which is $89,725 lower than 2011 and $384,843 less than in 2010, he said.
   Plumsted’s budget difficulties stem from a $35 million decline in its ratable base, which has caused the loss of $535,000 in anticipated tax revenue since 2008 — including $300,000 last year alone — due to tax appeals, Mr. Dancer said.
   ”That’s $535,000 in actual tax dollars that the township anticipated receiving, but by order of the tax court never received,” Mr. Dancer said. “That took most of our surplus and created a tax flow challenge. The (state) Local Finance Board approved the township to borrow a tax appeal refunding bond in the amount of $218,000 … that’s borrowed cash that must be repaid over three years.”
   The $359,529 transitional aid request, if granted, would help address the rest of the shortfall caused by the successful tax appeals, Mr. Dancer said.
   Mr. Dancer said there were no plans to hold a referendum seeking voter approval to exceed the state-mandated 2 percent tax levy cap — even if the transitional aid application is denied. Last year, Plumsted voters overwhelmingly defeated a levy cap waiver question that sought approval for an additional $97,000 in spending, representing less than 1 cent on the tax rate.
   If the state denies Plumsted’s transitional aid application, Plan B is to make up the budget shortfall by tapping into the nearly $1 million in school deferred taxes that the municipality now has on hand, Mr. Dancer said.
   ”Because the school is on a fiscal (budget) year, and the township is on a calendar (budget) year, we always have six months of collected (school) taxes not yet dispersed to the schools,” Mr. Dancer said. “The state permits municipalities to utilize the deferred portion (of school taxes) for their own budget purposes.”
   The reason municipalities don’t like to spend that money normally is because holding six months’ school taxes in abeyance helps improve municipal cash flow and, when interest rates are high, generates revenue for municipalities.
   The state does allow the towns to use deferred school tax money, however, because it will be replenished by new tax collections before it is time to turn the money over to the school district.
   The public hearing and adoption vote on the 2012 municipal budget is scheduled for 8 p.m. April 4 in the municipal building on Evergreen Road.