Residential taxes will rise by an average of $57.39, under the 2011 municipal budget approved Wednesday night by the Scotch Plains Mayor and Township Council. The budget totals $23,491,080.15, which is about 2.32 percent higher than the budget for 2010, according to a presentation delivered by Township Manager Christopher Marion. The municipal tax levy falls $451,802 below the state-mandated property tax cap. That amount can be banked to use against the cap in either of the next two years.
The look of this year's budget is slightly different than in previous years. A new state law effective March 31 requires towns to withdraw public library budgets from their overall municipal budgets, and to delineate the library budgets as separate line items. Hence, technically speaking, the municipal budget is about $22.2 million, and the library budget is about $1.3 million.
Marion emphasized that the library budget is not a new charge, fee or tax. In fact, it matches the state-mandated minimum, which is $58,941 less than it was in 2010.
Here's the rundown. More about the meeting at bottom, under "Council Debates Budget."
The full municipal budget calls for about $23.5 million in total expenditures:
- $5,866,015, or about 25 percent of total expenditures, for public safety
- $3,379,400, or about 14 percent, for insurance
- $2,244,832, or about 10 percent, for deferred charges and statutory expenditures
- $2,210,900, or about 9 percent, for public works
- $2,153,936, or about 9 percent, for general government
- $1,962,997, or about 8 percent, for debt service
- $1,161,000, or about 7 percent, for reserve for uncollected taxes
- $1,347,193, or about 6 percent, for the free public library
- $1,129,240, or about 5 percent, for parks and recreation
- $919,000, or about 4 percent, for utilities (including streetlights)
- $375,000, or about 2 percent, for fire hydrant service
- $163,500, or about 1 percent, for municipal court
- $114,067, or less than 1 percent, for grants
- $15,000, or less than one percent, for capital.
Capital improvements include:
- Roadway improvements:
- Raritan Road from Rahway Road to Clover Lane
- Katherine Street reconstruction from Mountain Avenue to Route 22
- Survey and design of improvements to Channing Avenue
- The 2011 streets and roads improvements program, which can be viewed by clicking the appropriate PDF thumbnail at right.
- Drainage Improvements:
- Muir Terrace storm sewer installation
- Golf Street storm sewer installation
- Park improvements:
- lighting upgrades
- Kramer Manor Park basketball and tennis court reconditioning
- Acquisition of Vehicles and Equipment:
- Replacement thermal-imaging cameras for the fire department
- Replacement vehicle for the engineering department
- Portable sound system for various departments.
Marion stated that funding for three vacant positions – a police officer, a motor-broom driver/public-works repairer, and a part-time clerk typist in the Clerk's Office – has been suspended until 2012. He added that the township has not planned any layoffs for the remainder of the budget year.
Fall branch pickup, meanwhile, "is still something we cannot fund at this time," Marion said.
The budget plans for revenue of about $19.8 million. It will require an appropriation of about $2.4 million from the township's fund-balance or surplus.
- $14,216,121, or about 61 percent of total revenues, from local taxes
- $2,371,000, or about 10 percent, from fund balance
- $2,227,587, or about 10 percent, from state aid.
- $1,481,610, or about 6 percent, from other miscellaneous revenues
- $1,327,193, or about 6 percent, from the municipal library tax levy
- $688,000, or about 3 percent, from delinquent taxes
- $570,000, or about 2 percent, from uniform construction code fees.
- $384,000, or about 2 percent, from open space debt service
- $105,569, or less than 1 percent, from state and federal grants
- $100,000 or less than 1 percent, from capital surplus
- $20,000, or less than one percent, from interest on investments.
Marion noted that Scotch Plains experienced a 22-percent reduction in its municipal state aid in 2010, but that the 2011 budget anticipates no further reductions in state aid this year. It plans for the same level of funding as last year, about $2.2 million.
He added that the interest the township collects from investments and deposits has declined by 75 percent from 2010 to 2011 due to reductions in interest rates.
The budget includes a total 4.7-cent increase from 2010. For an average Scotch Plains home, valued at $122,100, that translates to a municipal tax increase of $57.39.
Potential Challenges and Opportunities
Tax appeals have sharply increased over the past four years, Marion said, which has effectively decreased the township's tax revenue.
"We had 209 tax appeals this year to date. Last year, we had 166. In 2009, we had 50. In 2008, we had 30. Go back even further, and we had about 12 tax appeals per year," he stated.
In addition, national, state and local economic conditions have been slow to improve, even as health insurance, pension and utility costs have increased. Hence, in 2012, further layoffs and reductions in service "are not off the table, unfortunately," Marion said.
He added, however, that the township is taking advantage of as many cost-savings opportunities as possible, such as shared- and inter-local service agreements, cooperative purchasing and grants. Also, under a new tracking system Marion implemented in 2010, every expenditure is closely monitored and categorized.
"We are trying to understand all the costs that come out of this building," Marion said. "Nickels and dimes do add up in these economic times." he said.
Council Debates Budget
Councilmen Kevin Glover and Mickey Marcus voted against the budget. They argued that the township should use more of its municipal surplus, or , to offset the tax levy and prevent a tax increase.
"It is perfectly legitimate and reasonable to take advantage of the abundance of surplus funds available," Marcus said. "I am not going to agree to a $453,000 tax-levy increase one month after we learned of an $800,000 sewer-utility surplus."
In calling for a tax freeze, the two Democrats on council struck an unusual alliance with members of the Scotch Plains-Fanwood Tea Party. About 15 members of the organization attended the meeting, including Scotch Plains resident Frank Festa, who read from a prepared statement (included as a PDF at right) that called for spending cuts of about $550,00 to avoid a tax increase.
"With hard economic times and many residents cutting back on their budgets, we believe that the Scotch Plains Town Council should take the same approach and provide this modest relief," Festa said during the public hearing on the budget. "The reduction of $550,000, or 2.3 percent of municipal expense, is a needed break after years of steady growth in municipal expense."
Former Mayor Martin Marks, however, pointed to his own experience in office as evidence against implementing what Glover, Marcus and members of the Tea Party termed a "zero-percent tax increase." His decision to use surplus funds to institute a tax freeze in 2000, he argued, resulted in a 17-percent tax hike just three years later, when the township did not generate enough revenue to sufficiently replenish the surplus it had used.
"It was a mistake," Marks said. "We were overly-aggressive with that surplus."
Nevertheless, Glover advocated "relief now," and introduced a motion to table the vote on the budget. Marcus seconded and voted for the measure, but it was defeated 3-2.
Deputy Mayor Mary DePaola dismissed Glover and Marcus' proposal as "reckless and very speculative. Adjustments could be made to revenues and fund balance to make that work. But it's a shell game. It's smoke and mirrors."
Councilman William Vastine agreed. "The reality of it is we all have very short memories," he said. "We say that today is the day we want our money. And if we were to do that, and we did have a problem next year, then next year we would have everyone at the same microphone complaining about the increase."
Mayor Nancy Malool argued that using more of the surplus to offset a tax increase would require "anticipating more revenues than you need to, than you should," which she termed, "a bad idea, in case you don't regenerate the surplus."
Shifting the sewer utility surplus to the general fund, she continued, is "one of the most inequitable things we can do. The same people don't pay it, and they don't pay it proportionally." For example, non-profit organizations do not pay taxes, but they do pay the sewer utility.
Malool ultimately called for a vote on the budget, which was moved by DePaola and seconded by Vastine. The budget passed 3-2.
Editor's Note: Due to an error with Patch's content management system, the PDF of the Scotch Plains-Fanwood Tea Party's statement did not upload correctly and, when clicked, appeared blank. The issue has been corrected, and the statement can now be viewed by clicking the appropriate thumbnail above.
Correction: This article has been amended to reflect the following correction made May 20, 2011:
A previous version of this article incorrectly stated that the township received about two percent of its revenue from fees assessed Union County College. That revenue is from uniform construction code fees.