Town Budget Features Tax Increase, Spending Cuts
Non tax revenue declines as town puts budget together.
Declining non-tax revenue has caused the town to draft a budget featuring a property tax increase and spending cuts, including the elimination of positions from town government.
Town budget officials have said the decline of non-tax revenue is the main theme behind the development of the 2010 budget. These declines include a reduction in state aid, along with declines in fee income and investment income. Councilman Mark Ciarroca, the finance committee chairman, and Town Administrator Jim Gildea briefed the Town Council during Tuesday evening's Council meeting.
"This is a budget of significant revenue decline," Gildea said.
The town is seeing a $941,470 decrease in state aid, as a part of Gov. Chris Christie's decision to decrease state aid to municipalities and school districts. In addition the housing crisis has caused construction permit fees to decline and the declining amount of surplus funds has caused a decease in the amount of investment income available to the town government.
To make up for the revenue drop, the finance committee has recommended spending most of the town's available surplus. The budget will spend $1.84 million of the town's $2,121,142.63 surplus account on the 2010 budget. In addition, the town's sale of assets bank account will be virtually eliminated with $1.293 million being spent out of this account to fund the budget. The sale of assets will contain $711 after this budget, which Gildea said is being kept in the account so the account remains active for when the town decides to sell more assets in the future.
The sale of assets account has been used to balance budgets in the past, with the account dropping by almost $2 million from 2009 to 2010 to fund the budget. The practice became a debate point in last year's mayoral race with unsuccessful Democratic nominee Bill Brennan criticizing Mayor Andy Skibitsky over the practice.
Gildea said the town is projecting a minimum of $1.332 million being returned to the surplus account at the end of 2010. This is based on funds projected for unanticipated revenues, unspent funds and money received through deferred school taxes not turned over the school district under a state law allowing for the revenue sharing. Gildea noted this figure could go up based on revenue streams the town cannot estimate at the present time.
The budget proposal contains a $180.96 tax increase on the average assessed home of $185,100. In a budget memo to the Town Council, Gildea notes that the increase will be $15.08 a month for the average assessed home. The town was prohibited by the state from exceeding the cap in order to make up the loss in state aid, a practice allowed in past years.
The tax increase remains at the top of the four percent cap imposed by state law on municipalities.
The budget includes a $1,119,349 - or 6.5-percent decrease in salaries and wages - along with a $25,643 - or .84-percent decrease - in operating expenses. The total budget of $39,107,681, is $546,363 - or 1.38-percent - less than last year's budget.
The budget proposal includes the elimination of 11 fulltime positions in town government. Gildea stressed that no one will be laid off under the proposal but attrition is being used to reduce the jobs from town government. The eliminated jobs include three police officers, a firefighter, the three custodians that worked in the Municipal Building, the town's human services director and a health department staffer. The town has already implemented a plan to have a public works staffer handle custodial duties in the Municipal Building along with merging the Human Services Department with the county.
"All of these employees are already gone," Gildea said.
The town will also be moving three full time positions to part time status. These will employees in the town clerk's office, the tax collection office and the assessment office. Done mid year, Gildea and Ciarrocca both said this will result in reduced customer service hours in these departments.
The budget proposal will eliminate 23 part time seasonal positions in town government, including crossing guards, tax collection employees and summer workers. Gildea noted that in these jobs, staffers will either be dismissed when their employment is up or not rehired for future years.
The town will also shift three fulltime jobs and three part time jobs off of the town's payroll and on to other pay rolls. This will include shifting Recreation Department employees onto the payroll of the trust funds maintained by the Recreation Department or on to the pool payroll. The pool operates as a self funded utility. Staffers in the town's finance department that work directly with the library will see their payroll shift to the library, where they will be funded by money the library gives back to the town.
A similar practice will be used at TV-36, where the entire salary and wage budget is being eliminated and the costs will be shifted to the library, which has been working with the television station on new programming.
The budget contains a $73,000 - or 15.05-percent - cut for salaries and wages for crossing guards. Ciarrocca stressed this figure represents the total pot for crossing guard salaries and does not represent an exact amount of potential crossing guard layoffs. He reiterated previous comments that the exact number of layoffs will be determined by the Council's public safety committee, which is in the process of studying the issue.
Town officials noted that the budget was designed looking for the current year and in future years as well. This includes additional savings being seen from the retirements that occurred this year when full savings will be found. In addition, they have noted the shifting of workers off a taxpayer supported payroll and changes made in 2009 to the town's debt financing will help the 2011 budget. Ciarrocca and Gildea did note 2011 will remaing challenging and would see a larger challenge if Christie's constitutional amendment calling for a 2.5-percent property tax cap were to pass.
Ciarrocca praised the firefighters' union and the Teamsters for accepting a one year wage freeze as part of new contracts ratified last year. Echoing comments he made last year, Ciarrocca said this, along with a one year salary freeze made by non-unionized employees prevented wide spread layoffs in this year's budget.
"The employees in these bargaining groups and the non unionized employees should be commended for understanding the financial reality we face and for recognizing the need to support their fellow employees," Ciarrocca said.
The town continues to negotiate with the police union, but Ciarrocca and Gildea noted the budget does not contain funds for a salary increase for police officers.
Ciarrocca said additional retirements are expected from town government which will assist in saving funds for 2011.
Town officials also noted that past budgets helped to position to the town for this year. Gildea's budget memo notes that the tow has reduced or eliminated 27 positions since 2006. This includes moving prior recreation posts to trust fund income over tax income.
The budget will be formally introduced next Tuesday, when the town will make a formal presentation to residents. Final passage of the budget is expected on June 22, according to plans outlined by Gildea on Tuesday evening.