SOUTH RIVER — The $16.5 million municipal budget adopted by the Borough Councilincludesa3percentincreasein municipal taxes for 2015.
Under the budget adopted at the April 13 council meeting, the owner of a home assessed at the borough average of $81,994 would pay $1,602 in municipal taxes this year — a $53.30 increase from 2014.
In November, Mayor John Krenzel warned that taxes would have to increase.
“There may have to be more cuts, and I will tell you right now, there will be a tax increase next year,” Krenzel said at the Nov. 24 council meeting.
The $16.5 million budget, which represents a $251,593 decrease from the 2014 budget, calls for a municipal tax levy of nearly $8.1 million.
Last year’s tax rate was 1.889 per $100 of assessed valuation. That municipal tax rate, which excludes school, library and county taxes, will increase to 1.954 cents per $100. The municipality was able to raise taxes above the state-mandated 2 percent cap by using its cap bank, which was accrued from previous budgets that did not reach the 2 percent cap.
Councilman Shawn Haussermann, a Democrat, objected to the 3 percent tax increase, stating that it unfairly burdens residents and local businesses.
Citing an ordinance that would increase utility fees if adopted on April 27, Haussermann said he is dissatisfied.
“Increases at every level of the government — it’s just wrong to be raising taxes at this time, to be hitting up the businesses … the residents and anybody who wants to do business,” Haussermann said. “This budget just seems to be a money grab from every possible method that could be used to get money from the residents.”
However, Councilman Tony Ciulla, a Republican, said the borough should be run like a business, stating that cuts to taxes and fees would be detrimental to borough finances.
“The borough is a business. If you start cutting like people want to do, the business is going to fold,” Ciulla said. “You have to keep progressing forward, and the only way to do it is the way we did this budget.
“You have to make money or you’re done.”
Krenzel, a Republican, said while lowering taxes would be ideal, there are constraints on the borough that prevent the council from doing so.
“This year’s budget continues the efforts of the fiscally conservative members of the governing body to put the town back onto a sound fiscal path,” Krenzel said, adding that when taxes and utility rates were lowered in 2013 it resulted in a financial loss for the borough.
“The reality is, it affects [taxpayers] indirectly,” Krenzel said. “For years, the governing body brought $3.5 million from the electric utility to the current fund for tax relief, so when you cut the electric rates that money is not there.”
Krenzel supported last year’s decision to increase rates and taxes, and cited pressures on the borough — such as an increase in Middlesex County Utilities Authority wastewater treatment costs — as a reason municipal taxes must be increased again.
“It’s easy to talk. I’d love to lower taxes,” Krenzel said. “But it’s not going to happen. Last time it was done it made a mess of the budget, and I’m not going to let it happen again.”
Ultimately, the budget was adopted in a 5-1 vote, with Haussermann casting the dissenting vote.