Howell officials have proposed a preliminary 2010 municipal budget that includes no layoffs of or furloughs for Howell employees.
But under the proposed budget, the municipal purposes tax rate will jump from 28.2 cents to 32.5 cents per $100 of assessed valuation.
Using those figures, an individual who owns a home that is assessed at $350,000 will see his municipal tax bill rise from $987 to $1,137, an increase of $150 this year.M
unicipal taxes are one component of an overall property tax bill that also includes Howell K-8 School District taxes, Freehold Regional High School District taxes, Monmouth County taxes, a fire district tax and other assessments.
“It is a legal budget and it is within cap,” Howell Chief Financial Officer Jeffery Filiatreault said in an interview. “I don’t think it is an outrageous increase. If the council is happy with it, it’s ready to go.”
But the township will not have final budget numbers until after March 16, when Gov. Chris Christie presents the state budget, which will include state aid amounts to municipalities. Local officials have been told to plug in last year’s state aid numbers for now to work on their budget, Filiatreault said.
Township Manager Helene Schlegel and Filiatreault presented the proposed $44,327,565 budget to Mayor Robert Walsh and the Township Council at a special meeting earlier this month. The total budget is up 3.9 percent from last year’s budget of $41,096,796.
Schlegel and Filiatreault first met with department heads in November to discuss their budget requests for 2010, she said.
“We cut $2.2 million off the department heads’ requests because we needed to get under cap,” Schlegel said at the meeting. “We are now at the 1997 level. I just wanted to be sure everybody heard that. We have the same operating expenses for the individual departments that were allocated in 1997.”
The amount to be raised in local property taxes to support the municipal budget will rise from $19,380,000 in 2009 to $22,486,00 in 2010, Filiatreault said.
Howell still faces a number of fiscal challenges, including stagnant or reduced state aid, increases in employee benefits costs and energy costs, reduced revenues from fees and investment income, and increased pension costs, Schlegel said.
Rank and file employees in 2009 had to take up to eight weeks of furlough time in order for the township to bring the budget under the state-imposed caps on appropriations and tax levies. There are no furloughs or layoffs planned for this year, township officials said.
“This year is not as bad as last year,” Filiatreault said. “We did not have a series of cap problems as we did last year. There was a lot of work in the background to get to this point.”
The proposed budget calls for using $3.4 million from the surplus (savings) account, which includes deferred school taxes. That leaves a cushion of $600,000, he said after the meeting.
Walsh asked Filiatreault at the meeting if he considered the $600,000 enough surplus for the year.
“This is a little troublesome,” Walsh said. “We are not replacing our surplus. Is this an acceptable amount, Mr. Filiatreault?”
“Any level of surplus is acceptable,” the CFO responded. “I do try to retain 3 percent. The surplus is shrinking. We are not replenishing what we are using. Eventually we are going to run out [of surplus]. That is the evil that was wrought us with this 4 percent tax levy cap. It forces everybody to use their surplus.”
The township was able to maintain a 15- year run of solid $6 million surpluses in the past, he said.
“The problem is now we are not replacing the surplus,” Filiatreault said. “It is slowly dwindling. We are unable to replace it and we don’t have enough revenue to replace it. We are losing our cushion. We are within the cap. All the towns will probably end up with zero surplus.”
The municipal tax collection rate has also dipped slightly, from 97.8 percent to 97.3 percent, he said.
Municipal taxes make up 14 percent of a property owner’s total tax bill, Schlegel said. School taxes account for 71 percent of the total tax bill, followed by county taxes at 12 percent. Other assessments account for the remaining 3 percent.