By Lea Kahn, Staff Writer
Lawrence Township taxpayers may wince when they write their quarterly check for property taxes, and some of them question how the municipality spends their hard-earned money.
But the truth is, only 21 percent of that tax bill goes into the municipal government’s coffers, Municipal Manager Richard Krawczun said last week. The rest of the money is turned over to the school district and county government, because Lawrence Township serves as the tax collector for them.
Mr. Krawczun broke down the tax bill for Township Council and the handful of audience members at the council’s March 5 meeting, explaining where the money goes. He said 52 percent is allocated to the Lawrence Township school district, 27 percent goes to Mercer County and 21 percent is kept by the municipal government.
”There is no denying” that municipal property taxes have increased between 2008 and 2012, Mr. Krawczun said. The reason is the combination of a drop in state aid from $5.1 million in 2008 to $3.9 million in 2012 and a $165 million decline in the property tax base as a result of successful tax appeals, he said.
The property tax appeals, which reduce the assessed value of properties, have eroded the tax base. As a result, the township has increased the amount of money to be raised by property taxes to support the municipal budget from $19.1 million in 2008 to $22.5 million in 2012.
”I understand people are frustrated (by increases in the property tax rate). I get that. But I also think some level of objectivity (is needed),” Mr. Krawczun said, adding that people also need to understand where their money goes.
Taking a house assessed at the township average of $161,569 and its 2012 property tax bill of $7,252.83, the manager explained that 52 percent of that amount or $3,800 goes to the Lawrence Township public school district; $1,900 is paid over to Mercer County; and Lawrence is left with $1,500.
While the tax collection rate is anticipated to be nearly 100 percent, state law requires a municipality which serves as the tax collector for the school, the county and the municipality to set aside money in a reserve fund in its own budget to cover the shortfall. That’s because the school district and the county receive all of the money they bill to taxpayers, regardless whether all property owners pay up.
Last year, the reserve for uncollected taxes was $3.5 million, which accounted for 14 cents of the 89-cent municipal tax rate. The 14 cents was divided among the school, the county and the municipality 7 cents for the school taxes, 4 cents for the county and 3 cents for the municipality, he said.
Mr. Krawczun said Lawrence Township also is responsible for reimbursing property owners who have filed successful property tax appeals. The township had to reimburse $1.1 million in 2012 to property owners who succeeded in reducing their property’s assessment.
And of that $1.1 million which was refunded, Mr. Krawczun said, $924,000 was to cover the school district and county taxes billed to those property owners. Neither the school district nor the county had to come up with their share of the $1.1 million, he said, adding that “we (the township) are required to pay the full amount (of tax refunds).”
Mr. Krawczun said the township has taken “major blows on the revenue side,” and it has cut staff and also negotiated new union contracts that save money. The township administration saw that changes were taking place, anticipated them and took action to deal with them, he said.
Councilman Michael Powers told Mr. Krawczun that his presentation “is an endorsement” of the townshipwide revaluation that is under way. The property tax appeals and the loss of revenue will be eliminated because all properties will be assessed at their full market value.
Municipal Attorney David Roskos pointed out that Lawrence Township has a lot of commercial property which generates revenue and reduces the property tax burden on residential property owners except that the recession has taken its toll on some of those properties.
Mr. Roskos pointed out that an office building on Franklin Corner Road has remained vacant and the property owner sought a reduction in the assessed value. It’s nothing that the township has done the economy is collapsing, he said.
When Mr. Powers said the township has laid off more than 30 employees over the past five years, Mr. Roskos said it is the towns that have “run a tight ship that are hurting the most. There is no surplus ballast” to throw off the ship, he said.
”For months, you have been saying this,” Mayor Jim Kownacki told Mr. Krawczun.
”You told us how hard it will be. There is no more cutting. What more can we ask for? The residents have to see it. They have been beating up on us, that we are not doing the proper job. You have been out in front on this. That is a real leader. I take my hat off to you,” Mayor Kownacki said.

