By Philip Sean Curran, Staff Writer
The Princeton Council’s reliance on a reserve of unspent money to balance the budget has some members worried about the long-term fiscal health of the municipality because that fund is not replenishing itself fast enough.
As a quick fix, the council will decide Monday whether to raise taxes by an extra $150,000 in 2016 to use less of the fund — the equivalent of a savings account — in a proposed $61.9 million budget. The tax hike would add an extra $20, at the average assessed home, to the municipal portion of the tax bill.
But looking to the coming years, one official this week warned that the town needs to put its financial house in order and stop “living off its savings.”
Councilman Bernard P. Miller on Wednesday said that if officials were to continue this “trend” of drawing down the surplus, the town would jeopardize its AAA bond rating and put “our fiscal health” at risk.
Last year, that fund fell by close to $700,000, and is projected to fall again this year.
Councilman Patrick Simon said Wednesday that the surplus went down by about $680,000 in 2015, an unanticipated drop. The town needed to use that money because revenues, such as money from parking tickets, had failed to meet projections set by town officials.
For this year, officials expect the reserve to go down again, this time by approximately $260,000, said Mr. Simon, a member of the council’s finance committee along with Mr. Miller and Councilwoman Jo S. Butler.
Mr. Simon said officials are trying to determine whether the trend is something to worry about. In the meantime, he suggested the town either cut spending or increase taxes to keep the surplus fund level or at a slightly higher amount.
For this year, he suggested cutting the budget in half for the customer service program Access Princeton, which costs annually about $216,000 and is a favorite of Mayor Liz Lempert’s.
For his part, Mr. Miller wants the town to get a handle on its finances, with municipal spending projected to grow 1 to 2 percent every year for the foreseeable future. He said continuing down this road would lead the town to have to make difficult choices in a community whose residents expect a high level of government services for the taxes they pay.
“Nobody likes to talk about cutting services, … it’s unpleasant,” he said. “But if you let it go long enough, it becomes more unpleasant.”
Mayor Lempert could not be reached for comment Wednesday.
Ms. Butler said town officials need to consider that incremental increases to government spending, like giving all part-time employees paid sick leave, will add up over time. She said the town cannot handicap itself from taking on big capital projects that have to be done, citing, for instance, the renovations to the fire house on Witherspoon Street.
The town is looking to get a better handle on its finances as municipal director of finance and deputy administrator Kathy Monzo leaves to become the municipal administrator of North Brunswick.
