Lawrence Township is proposing a 2-cent increase in the municipal tax rate as part of its $60.47 million budget for 2026, marking the first municipal tax increase since 2023.
Municipal Manager Kevin Nerwinski presented details of the proposed spending plan in his 2026 Budget Message, which he read into record during the Feb. 17 council meeting.
The recommended municipal tax rate would rise to 67.2 cents per $100 of assessed value, up from 65.2 cents last year. One penny on the tax rate generates $477,582 in revenue.
The amount to be raised by taxation in 2026 is $32.93 million, an increase of $1.09 million over 2025.
Property taxes would account for 53.08% of total revenues, up from 51.33% last year, reflecting greater reliance on the local tax levy to balance the budget.
For the owner of a home assessed at the township’s 2026 average residential value of $289,900, the municipal portion of the tax bill would increase from $1,874.96 to $1,948.13 — a $73 rise.
The total proposed budget is $60.47 million, essentially flat compared to the 2025 budget of $60.45 million.
Nerwinski said that proposed budget was crafted within the state’s 2% levy cap and does not use any available levy cap bank.
In an interview with the Gazette befiore the Feb. 17 meeting, Mayor Chris Bobbitt said rising benefit costs are the biggest factor pushing the 2026 spending plan.
“I think for the most part, this year’s budget is really being driven by healthcare costs right now,” Bobbitt said.
The township’s current health insurance coverage is through the N.J. State Health Benefits Program, which provides medical and prescription drug coverage to active and retired state employees, local government employees, and school board/county college employees.
The insurance appropriation is increasing by $1.38 million, a 26.32% jump over last year. Employees are projected to contribute $1.98 million toward their health coverage in 2026, up from $1.45 million in 2025.
Bobbitt said the township hopes to work with the state on the rising costs, but said the increases have been difficult to absorb.
“Hopefully we can work in partnership with the state. Control those costs, but right now it’s been a real challenge,” Bobbitt said.
He added that township is trying to limit growth in other areas, because additional major costs are on the horizon.
“Most everything else is pretty much staying flat, most areas, with a few exceptions of course,” Bobbitt said.
He pointed to upcoming needs tied to the fire service and municipal facilities, including the likelihood of a new firehouse and major work at the community center. He said earlier estimates for the community center were in the $3 million range, and he expects that figure would be higher now.
Salary and wage costs are increasing by $1.15 million. Bobbitt said inflation and the broader cost of living are affecting the township’s labor negotiations, too.
“It’s definitely impacted our contract negotiations with our bargaining units slightly above where it’s been in the past,” Bobbitt said. “Keeping their salary flat would be a salary decrease.
He said the township is focused on retaining employees by keeping compensation competitive, while also looking for non-monetary issues that can be addressed at the bargaining table.
Pension costs for the Police and Firemen’s Retirement System and the Public Employees Retirement System are rising by a combined $217,826.
The township’s joint insurance fund contribution is increasing by $156,660.
Recycling costs through the Mercer County Improvement Authority are rising by $66,485, and Social Security and Medicare contributions are increasing by $49,000.
Combined, the major listed increases in appropriations total $3.02 million.
The 2026 budget also includes consistent annual contributions of $55,000 to the township’s unemployment fund, $120,000 to the self-insurance trust fund and $51,000 to the accumulated sick leave trust fund.
Bobbitt said Lawrence is able to manage cost pressures in part because the municipal operation has remained lean for years, including through cross-training and shared responsibilities between departments.
“One of the great things I’ve always seen with how we deal with municipal operations is we’re pretty lean,” Bobbitt said.
Despite the operating increases, Lawrence continues to reduce its outstanding debt.
The 2025 year-end debt balance fell to $5.99 million from $8.37 million the previous year, a reduction of $2.42 million.
Another $2.42 million in debt reduction is budgeted for 2026. The township’s net valuation taxable increased to $4.78 billion, up $21.361 million over last year.
While the growth in ratables helps support the budget, the increase is about 35% lower than the gain experienced in 2025.
Bobbitt said having room under state caps has helped the township manage the health cost increases.
“Thankfully we banked both on the levy side and the appropriations side, because on the appropriation side, we have to use some of that cap space for these health cost increases,” Bobbitt said.
Lawrence will use $9.32 million in surplus as revenue in the 2026 budget, unchanged from last year. Surplus represents 15.41% of total revenues.
The year-end surplus balance is down $807,764 from 2024.
After applying surplus to support the 2026 budget, the remaining balance will be $11.97 million. Miscellaneous revenues will account for 29.61% of total revenues, down from 31.34% in 2025.
The township anticipates $1.15 million in receipts from delinquent taxes, unchanged from last year.
Bobbitt said one area the township is watching closely is revenue tied to cannabis sales, which he said has dropped as more dispensaries have opened across the region.
“Our tax rate, our income was about, I want to say $900.,000,” Bobbitt said. “And that has decreased, I think we’re assuming about $300,000 this year,” Bobbitt said.
He said the township is encouraged by what he described as stabilization in major retail areas, including investment and new tenants at Mercer Mall and steadier conditions at Quaker Bridge.
He called those large commercial properties important to the township’s tax base.
“Those are the two big retail ratables that keep me up at night,” Bobbitt said.
The reserve for uncollected taxes, a state-mandated appropriation to ensure sufficient cash flow to meet school, county and municipal obligations, is decreasing to $4.05 million from $4.50 million.
The governing body is expected to review the spending plan before holding a public hearing and voting on final adoption later this year.
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