The Lawrence Township Council got its first look at the proposed $49.4 million municipal budget for 2021 – which keeps the municipal property tax rate flat – at its Jan. 19 meeting.
The proposed 2021 municipal budget, which is expected to be introduced at the Lawrence Township Council’s March 16 meeting, is $1.2 million less than the 2020 municipal budget of $50.6 million.
There will be no change to the municipal property tax rate, which will remain at 59 cents per $100 of assessed value. The owner of a house assessed at the township average of $282,395 will pay $1,666 in municipal property taxes, which is one component of a property owner’s total tax bill.
Municipal Manager Kevin Nerwinski described the 2021 municipal budget as being on “hold.” There was a significant drop in revenue generated through municipal operations because of the COVID-19 pandemic, and the trend is expected to continue into 2021, he said.
While township officials are beginning 2021 with the knowledge that there is vaccine to protect against COVID-19, “the pandemic’s effects and impact leave many unanswered questions and the township’s financial future unclear,” Nerwinski said. “We are mindful of the uncertainty, and our approach is best described as remaining calm in the eye of the storm.
“In the coming months and most likely longer, the short-term and long-term negative impact of the pandemic will reveal itself to us,” he said.
In addition to a drop in revenue, township officials also anticipate a significant decrease in commercial ratable and tax collection overall, Nerwinski said. Once those factors become “real and quantifiable,” they will dictate the township’s approach in crafting the 2022 budget, he said.
“For now, we hold. There will be no new capital projects, except for our annual road improvement program. Staffing will remain consistent with 2020 levels,” Nerwinski said.
The main source of revenue to support the budget is property taxes. The amount to be raised by taxes is $27.7 million, which is $116,073 over the 2020 property tax levy. The increase is due to the increase in assessed values, not because of an increase in the municipal property tax rate, Nerwinski said.
Miscellaneous revenues, such as fees and permits, liquor licenses, and the hotel and motel tax, will generate $14 million in revenue.
Township official also anticipate using $6.8 million in surplus funds as a source of revenue to balance the budget – the same amount of surplus funds that was applied to the 2020 municipal budget.
Nerwinski said the town had $17.1 million in surplus funds at the end of 2020, compared to a year-end surplus of $16.9 million in 2019.
Lawrence Township also will receive $3.9 million in state aid for 2021. The amount of state aid has remained flat for several years.
Township Councilwoman Cathleen Lewis commended Municipal Manager Kevin Nerwinski and Chief Financial Officer Peter Kiriakatis for holding the line on the municipal property tax rate.
“I am sure the residents appreciate it,” Lewis said.
When Township Councilman Christopher Bobbitt asked how the pandemic has affected the township’s debt, Kiriakatis said that in normal years, the Township Council would be asked to approve two bond ordinances to borrow money for purchases.
One bond ordinance would cover the costs of purchasing miscellaneous items, such as computer equipment, radios, cars and trucks. The second bond ordinance would cover the cost of the road improvement program, Kiriakatis said. This year, there will likely be only one bond ordinance for the road program.
Nerwinski said the township has been “aggressively” reducing its debt. In 2010, the township was carrying $31 million in debt. It has been reduced to about $11 million in debt as the township continues to pay it off.
Mayor Jim Kownacki thanked Nerwinski and Kiriakatis for their efforts.
“It has been a tough nine months. Peter and Kevin and the department heads got us to where we are. We will recover from this. We will bounce back,” Kownacki said.