As the West Windsor Township Council voted 4-1 to adopt the 2009 $36.5 million municipal budget, council members began discussing their individual proposals aimed at getting a head start on planning — specifically to lower taxes — for next year’s budget.##M:[more]##
The tax rate in the 2009 municipal budget has increased by 1.7 cents to 33.09 cents per $100 of assessed valuation, and the amount to be raised by taxation is $20.6 million. Under the budget, the owner of the average assessed township home at $549,”345 will pay $1,”818.33 in municipal taxes this year, an increase of $93.39 over last year’s average $1,”724.94.
Council President Charles Morgan, who throughout the budget season has urged his fellow council members to examine his controversial proposal to use more surplus to reduce taxes, also pushed one of his recent ideas — to create a nonprofit community foundation specifically used for offsetting costs in the budget for various projects around town.
The council agreed to discuss the idea sometime in July, along with other initiatives and ideas aimed at cutting costs in next year’s budget.
During the public hearing on this year’s budget, council members agreed to put together a schedule for year-round quarterly meetings aimed at tackling budget issues earlier, so that ideas from individual council members could be fully vetted ahead of time.
Morgan said he read a memo Township Attorney Michael Herbert sent to council highlighting state laws as they pertain to the legality of a community nonprofit. He said from what he understood from the memo was that there are ways to initiate a nonprofit in town that would remain separated from the government. However, there are fine lines and rules that must be examined, he said. Those rules included specifications that the nonprofit organization cannot tax residents, and that revenues generated from the nonprofit foundation could not be anticipated in the township’s budget. So, in the worst case scenario, money generated through a community foundation could be donated to the township in a following year to help offset some costs.
What Morgan says he did find, however, is that a board can even be elected to run the nonprofit, but none of those elected to serve on the foundation can be governmental officials.
Councilman George Borek said there were two cases in Jersey City in which the fire department set up two community foundations, one of which is used to fund renovations and construction at the city’s firehouses when those firehouses need upgrades. “There are instances in which it does work,” he said. “I think there’s some merit. It does deserve a little further discussion.”
Councilwoman Diane Ciccone also agreed the issue should be discussed further, especially since the council had agreed earlier in the meeting to start discussing innovative ideas for budget savings as early in the year as July. “I think this would be the perfect time,” for the discussion, she said.
Councilwoman Linda Geevers remained skeptical, however, and said she would prefer to leave it to private groups to create community foundations. “I like the idea of the separations between these organizations and the government,” she said.
Morgan suggested that he would lay out a proposal with all of his research that would include various options the council could examine, ranging from “extreme involvement to low involvement.”
The discussion of the community foundation and other ways to lower the budget in the coming year came after a 4-1 vote on the current budget, with Morgan voting against it.
Throughout the budget discussions, Morgan has taken issue with the township’s AAA bond rating, which he claims has ended up costing the township more money than it saves. Morgan has been adamantly proposing to reduce the township’s surplus by $2.45 million, which he claims will lower the tax rate in this year’s budget by 4 cents. Under Morgan’s proposal, he advocated cutting back the $7.6 million in reserves by $6.65 million all together, leaving about $982,”832 in the fund balance.
The issue was a large topic during the recent mayoral election, when Morgan filed a complaint with the state Attorney General’s office and Mercer County prosecutor, alleging that Mayor Shing-Fu Hsueh and Linda Geevers — his opponents and winners in the May election — encouraged Chief Financial Officer Joanne Louth and Business Administrator Chris Marion to knowingly include errors in their analysis of his proposal. However, the mayor and Geevers deny this is the case and have called upon him to drop the charges. In turn, Morgan has said he plans to continue pursuing the matter, although no response has come yet from either of the two entities with whom he filed the complaint.
Morgan has pointed to Standard & Poor’s “analytical characterization of ratios,” which he says suggests that carrying 7 to 11 percent of surplus in the budget is more than sufficient for a municipality. Right now, the surplus lies between 22 and 26 percent, he said.
In Louth’s analysis of Morgan’s proposal, she said it would only result in a 7.3 reduction in taxes, not a 12.1 percent reduction. Further, the tax rate would be lowered to 29.1 cents, and not as low as 27.1 cents, as Morgan had proposed, which would be a 2.3-cent decrease in the tax rate, not a 4-cent decrease.
Following through with Morgan’s proposal could result in “total depletion” of the fund balance, Louth stated.
At the June 22 hearing, Morgan restated his position. “I put together a very serious proposal,” he said. He said the process was corrupted, and “I’m still waiting for a meeting, and answers to my draft response. My associates here at council should be outraged.” He said he was “saddened.”
“The community is not well-served when we cannot take a serious look at a proposal,” Morgan added. “Something’s broken, and I’m depressed by it.”
Other council members, however, voted to pass the budget. “I think that unless you’re going to have some layoffs or not honor contracts, it’s very difficult to get down to a flat budget,” said Councilwoman Linda Geevers, who had originally called for a zero percent tax increase.
Councilman George Borek said he felt the budget was reflective of the township’s efforts to maintain the level of services currently offered to its residents. He also called for earlier discussions on the budget, especially since the community is growing, and there will be a need for more emergency, fire, and police personnel to respond to the growing number of calls coming in. “How do we provide the level of service without increasing the budget?”
There were still residents who said they felt the council could have done more. Andrew Hersh, who is also planning to run for a council seat in November, said that his house falls into the average assessment in town, and that “$1,”000 is a lot to me,” in a municipal tax bill.
He said he would like to see more volunteers step in to provide some of the services accounted for in the budget, saying he would be willing to volunteer to perform jobs like painting and other work, rather than having to pay taxes for the township to contract out the work. “Let’s hold the budget flat, and let’s force ourselves to do these things. Can we come together as a community to subsidize some of these costs?”
The vote came after a presentation from Township Chief Financial Officer Joanne Louth, in which she explained that the municipal tax increase is 5.4 percent, which reflects a 1.7 cent increase from 31.4 cents per $100 of valuation to 33.1 cents. This year, the average assessed home at $549,”345 will see an increase of $93.39 in taxes.
However, the $108,”333 loss in state aid, and $213,”765 in state-mandated pension increases account for $27.47 of that $93.39 increase. The tax increase resulting from the municipality is $65.92, she said.
In addition, West Windsor’s budget is $196,”556 under the state-mandated 4 percent tax levy cap limit. While the tax levy technically has increased by 5.4 percent, Louth says the state allows municipalities to exclude the tax increase associated with the loss in state aid and pension increases. So, of the increase, 1.6 percent of the tax levy increase — or .5 cents of the increase — is directly a result of the state. The tax increase from the municipality is 1.2 cents — or 3.8 percent — which keeps it under the 4 percent increase.
Louth also pointed out that the total budget increase in 2009 has been the lowest increase seen in West Windsor in the last 15 years.
In 2004, the total budget increased by 4.33 percent — to $27.95 million. In 2005 the budget increased by 3.93 percent to $29.05 million, and in 2006, it increased to $31.4 million — an 8.11 percent increase. In 2007 the budget increased to $32.8 million, a 4.54 percent increase, and in 2008 the budget increased by 7.92 percent, for a total of $35.43 million.
In 2009, there is a 3.06 percent increase, to $36.51 million.
The municipal portion of a resident’s tax bill is not the only portion that will increase this year. The school tax rate increased from $1.252 to $1.304 this year, and the county, library, and open space taxes increased from .506 to .523, Louth’s chart showed.
All together, the municipal portion of the tax bill only accounts for 15.1 percent of a resident’s total tax bill. School taxes account, by sharp contrast, for 59.6 percent (or 1.304 cents), while county, library, and open space taxes account for 23.9 percent (or 0.523 cents). With all of those put together, the total tax rate is $2.188 per $100 of assessed value.
In an interview after the budget was adopted, Louth also pointed out that the township is active in pursuing shared services agreements. “We have agreements with Plainsboro Township for animal control services; Hightstown and Robbinsville for health officer services; Mercer County Improvement Authority for recycling; and we belong to a purchasing cooperative where we economize on our purchase of salt for the roads for inclement weather, for our fuel — diesel and unleaded,” she said.
Currently, the recycling process separates cans, tins, and newspapers from each other. Officials there are looking into a system allowing everything to be collected together, in order to save more money, she added. “We’re always looking to see if there are other ways to save costs.”
Louth also explained the tax levy increases since 2000. While it is true that on face value, the tax levies have increased by 109 percent when comparing the increases from 2001 to 2009, those tax levies reflect the growth of the township over that period of time, which adds more value to the ratable base.
Included in the tax levy increase are new homes, businesses, additions, and other growth, which means comparing the tax levies on a year-to-year basis is like comparing apples to oranges, Louth agreed.
Saving Money Next Year in Construction Fees? Meanwhile, Councilwoman Linda Geevers put forward an idea of her own — to find a way to correct what she says is an unfair burden to West Windsor taxpayers, who solely foot the bill for inspection and construction fees associated with expansion projects at Mercer County Community College.
Because West Windsor is the host community for the college, it is required by state law to pay for all of the fees associated with construction and expansion, Geevers says. “It’s ridiculous,” Geevers said. “We’re losing like $250,”000 a year in all of these kinds of fees.”
“This could be tremendous because they’re going to be expanding from what I understand, and this is going to be a tremendous burden on the West Windsor taxpayers,” she added. “There are students who come from all over the area, including from Pennsylvania. Why should West Windsor have to be stuck with paying for all of these fees?”
Geevers says she believes the county should pay for the fees, or that a system similar to that of the West Windsor-Plainsboro Regional school district — which divides the cost to taxpayers between West Windsor and Plainsboro based on the number of students each sends to district schools — should be implemented.
Geevers says construction officials are putting together a packet of information for the council, which includes a laundry list of fees that were waived over the past two years and that had to be covered by West Windsor.
She says she wants council to be able to have the information and discuss ways to remedy the problem in time for next year’s budget. She says she expects the issue will come up for discussion sometime later in the summer.
