By Charley Falkenburg, Staff Writer
MONTGOMERY With a unanimous vote, the Township Committee introduced a proposed $33.7 million 2012-2013 municipal budget that faces a $4 to $5 million gap at its April 5 meeting.
The budget is within the mandated 2 percent cap and has a proposed tax increase of 1.8 percent. With a .312-cent municipal tax rate and average home assessments at just under $500,000, homeowners can expect a $35 increase for municipal government.
The committee also shaved spending by $85,000 by reducing employees through attrition, shared service agreements with Hillsborough and Branchburg and debt service payments bringing the proposed budget below 2004 levels.
The bulk of spending goes toward health and public safety and debt, making up almost half of the town’s expenditures.However, the town will still have to deal with the multi million-dollar gap.
The gap is the result of the township consistently using up the non-reoccurring surplus to increase annual spending in previous budget years the worst years being 2005 and 2006 when the committee used over 40 percent of the surplus to balance the budget instead of revenue or state aid.
”It’s like being at home, you can’t spend more than you’re bringing in for very long,” said Chief Financial Officer Walter Sheppard.
Mr. Sheppard explained the bulk of surplus comes from residential growth, but with the residential growth in decline, Montgomery’s surplus has decreased from a high of $20 million to $2.5 million this year.
The proposed budget would still be funded by 10 percent of the surplus.
”This is the first year where surplus is below the $4 to $5 million level,” said Mayor Ed Trzaska. “Up until now, there’s always been a surplus to fill that gap this is where we get this large gap.”
Other contributions to the deficit include mandatory cost increases such as pensions, insurance, union contracts in addition to a reduction in house assessments due to a spike in tax appeals.
”The tax appeals are really hurting us, but unfortunately there’s been a lot of public press on it and a lot of word by mouth by neighbors,” said Mayor Trzaska. “What people don’t remember is if a whole bunch of people in town get their taxes lowered, it spreads out and the rest need to pay more.”
Mr. Sheppard attributed the tax appeal increase to a recent Star Ledger article.
”When that article came out, it encouraged people to consider filing tax appeals,” he added. “The last two or three days we got flooded with tax appeals in Montgomery that exceed last year’s numbers.”
In an effort to close the gap, a committee will be formed to develop a three-year plan, which will look for ways to improve internal efficiency, review opportunities for shared services and find sources of revenue that aren’t one time fixes.
The committee would also use a portion of the proceeds from the Skillman Village sale to avoid large tax increases or significant cuts to the police department. Some of that money will also be used for direct property tax relief and debt payment with the rest being escrowed for future property tax relief or debt reduction.
Using money from the Skillman Village sale would be tapping another one-time revenue, but Mayor Trzaska said it was necessary to maintain the committee’s two core principals: protecting public health and safety services and adhering to 2-percent property tax cap by doing more with less.
