By Lea Kahn, Staff Writer
Stymied by a mandatory 2-percent cap on municipal property tax rate increases, Lawrence Township officials might find themselves revisiting the issue of layoffs versus the elimination of garbage collection from the municipal budget.
Although the 2013 municipal budget is months away from being finalized, Municipal Manager Richard Krawczun offered a preview of the issues facing township officials as the budget preparation process gets underway.
Mr. Krawczun said he and Comptroller Peter Kiriakatis have been reviewing budget cap information over the past week and performed some calculations based on what they know and what they could reasonably expect of expenses for next year.
Given the state-mandated 2-percent cap on the municipal property tax increase, Lawrence Township would be allowed to increase the amount of property taxes it collects to support the municipal budget by $448,995, Mr. Krawczun told the council.
But after factoring in the township’s mandatory contributions toward pension and health care costs and the full amount of the reserve for uncollected taxes which totals $334,345 there is only $114,649 left of the allowable $448,995 increase, he said.
The reserve for uncollected taxes is money that is included in the municipal budget to cover shortfalls in property tax collections. The township acts as the tax collector for the Lawrence Township public school district and Mercer County, which means it turns over the full amount of property taxes assessed by the school board and the county.
Mr. Krawczun told council that after factoring in the $114,649 that is left over against estimated increases in municipal expenses such as wages, utility costs and debt service there is a revenue shortfall of $932,008 for 2013. This includes using $2.7 million from surplus funds as a source of revenue.
There are two options to solve the problem, Mr. Krawczun said more layoffs or dropping trash collection from the budget. The township laid off 13 employees to balance the 2012 municipal budget and reduced a 14th position from full time to part time to save money, and also kept municipal trash collection.
The first option laying off nine employees would save $818,000, he said. Four of those layoffs would come from the Police Department. The remaining five would come from “non-police” employees, he said.
Those layoffs would have to take effect during the first week or so of January to achieve the full savings, Mr. Krawczun said. Saving $818,000 would bring the 2013 municipal budget under the 2-percent cap by about $73,000.
”We are down to 182 municipal employees,” Mr. Krawczun said. “I think it is important for everyone to recognize that we are not flush with bodies employees. I bring this to you I am not trying to be alarmist or threatening, but this is a function of the formula.”
”The second option and I know this will anger some people is to completely eliminate (municipal) trash collection,” he said. This would bring the 2013 municipal budget under cap by $1.5 million, and also allow the township to begin to rebuild its budget surplus fund, he added.
Mr. Krawczun said the township’s contract with its trash hauler expires Dec. 1. The contract requires the township to give Central Jersey Waste 60 days notice if it does not plan to renew the contract.
If the township eliminated trash collection, it would be up to residents to make their own arrangements, Mr. Krawczun said.
Earlier this year, township officials were prepared to assess a “user fee” for municipal trash collection if voters rejected a special referendum to increase the municipal property tax rate by 9 cents, but a new state law prohibited them from doing so.
The voters rejected an April 17 referendum question that was seeking 9-cent increase in property taxes.
”I understand the objections to the referendum, objections to how it was explained but I want everyone to understand, we are not bluffing. This problem is going to continue, going forward,” Mr. Krawczun said.
The manager told Township Council that he did not expect an answer at the meeting, but the council members should begin to think about the 2013 budget and the issues. The council needs time to think about the issues in advance of the budget, he said.

