ALLENTOWN — Ongoing litigation between Upper Freehold Township and Allentown will continue to have an effect on the budget, members of the Borough Council said prior to introducing the 2015 municipal spending plan.
The budget is expected to produce an increase in Allentown’s municipal tax rate and in the taxes local property owners pay.
During the March 24 council meeting, Councilman Robert Schmitt was careful when he discussed the litigation and said a disagreement between the two municipalities regarding funding for the Hope Fire Company has proved to be a source of difficulty during the budget process.
“Our budget is being directly affected by our fire budget,” he said.
Schmitt said officials had to formulate a best case scenario and a worst case scenario for the litigation’s outcome when they were crafting the municipal budget.
The borough attorney suggested that Schmitt refrain from going into specifics of the legal proceedings.
According to borough officials, the proposed budget for 2015 totals $2.26 million and will be supported in part by the collection of $1.52 million in local taxes.
Allentown’s 2014 budget totaled $2.11 million and was supported in part by the collection of $1.48 million in local taxes.
The tax levy is the total amount of money to be collected from residential and commercial property owners to support the operation of the borough this year.
Borough officials anticipate using $230,000 in surplus funds (savings) as revenue in the 2015 budget. In 2014, officials used $171,239 from surplus as revenue in the budget. Allentown will be left with $383,863 in its surplus account.
Allentown will receive $131,595 in state aid in 2015; the same amount as 2014.
Councilwoman Madeline Gavin said the municipal tax rate is expected to increase from 76.5 cents to 79.4 cents per $100 of assessed valuation.
The increase in the tax rate will have a different impact on each property owner depending on the assessed value of his home and/or property.
Last year the average home in Allentown was assessed at $285,971 and the owner of that home paid about $2,187 in municipal taxes.
According to the Monmouth County Board of Taxation, in 2015 the average home in Allentown is assessed at $289,233. If the 2015 budget is adopted as proposed, the owner of that home will pay $2,296 in municipal taxes, an increase of $109.
In a different example, if an Allentown home that was assessed at $250,000 in 2014 is still assessed at $250,000 in 2015, the owner of that home will see his municipal tax rise from $1,912 to $1,985.
Operating expenses could drop from $908,799 in 2014 to $839,397 in 2015, according to the budget. Capital improvements will decrease from $50,000 in 2014 to $25,000 in 2015.
A public hearing on the budget has been scheduled for 7 p.m. April 28 at Borough Hall. The council may vote to adopt the budget after the public hearing.