In a time of economic extremes it is a time for extreme actions. In an effort to stave off an extreme tax increase, Plainsboro Township is pursuing unprecedented job cuts, and using one-time shots of revenue for tax relief, a practice frowned upon in the past by township officials.##M:[more]##
The $18.4 million municipal budget, to be introduced on Wednesday, March 23, will likely eliminate four positions — putting two employees out of work starting July 1.
The township is also applying the money raised from the sale of two liquor licences last year totaling over $1.1 million towards reducing the tax burden.
Township Administrator Robert Sheehan says the sale of a liquor license is a rare event (the town has two left), adding that the use of a one-time revenue to reduce taxes will have a relatively insignificant effect on future budgets.
Calling it an unusual tax year, Sheehan says that the township is pulling out the stops in order to keep the budget manageable. “We are going above and beyond our past practice in order to maintain costs,” he says. “Wages and benefits make up 56 percent of our budget and we have made an effort to take a close look at our hiring.”
As a result, the township has proposed the elimination of four existing positions: a receptionist (township clerks office), transportation director (community development), communications director, and secretary (community development). The position of transportation director has been vacant since last year. The position of secretary of community development will be transferred to court offices so the current employee will remain on the job. The employees in the receptionist position and communication director will lose their jobs on July 1.
Two of the four eliminated positions were only recently created. “We will have to work harder to provide these services, but it doesn’t represent a change in philosophy but a change in approach,” says Sheehan. He adds that the responsibilities will be redistributed to existing staff and there has also been money budgeted for the use of consultants as needed. The proposed budget also calls for a new position to be established in the municipal court offices to handle expected increased demands.
The amount of money the job cuts will save will be $86,”150 for the last half of 2005 and $222,”100 in 2006. “With the cost of benefits going up at a rate of about 15 percent per year, these savings will continue on in the future,” Sheehan says.
While there have been some reports that morale at town hall is running low due to the job cuts, Sheehan says that is not the case. “We are blessed with a first class work force here in Plainsboro and the success we have is directly attributed to these folks. It is important that we are mindful of our employees’ concerns, but I don’t think it will undermine us in anyway. These are challenging times and it is important that we all pull together.”
The $18.4 million budget for 2005 would represent a $1.5 million increase over last year. “We will still be taking a look at the budget and see what we can do with it,” says Sheehan. If that is the case, the budget may not be introduced until a later date.
As proposed, residents would see a 3-cent increase in the municipal tax rate to 21.8 cents per $100 of assessed valuation. The increase in the budget can be attributed to rising insurance, pension and utility costs, as well as increases in the library contribution and costs related to the property revaluation, according to a township press release.
Based on new values resulting from the past year’s township-wide property revaluation, this would result in a $210 increase to the average Plainsboro home. As an outcome of the revaluation, the average Plainsboro home jumped from an assessed value of $190,”700 to $395,”000.
This means that an owner of a home assessed at the township average of $395,”000 would pay about $861 in property taxes, an increase of $210 (in addition to the likely increase in school taxes) more than under the 2004 budget. Under the 2004 budget, the owner of a home assessed at the then township average of $190,”700 paid $648. But Plainsboro officials point out that direct comparisons of the tax levy between the 2005 budget and 2004’s $16.9 million budget are tricky because all property in the township was revalued last fall. Consequently, while some homeowners may see sharp increases in their taxes, others may see only modest increases or even a small decrease.
Sheehan says that in order to reduce the burden on the its tax payers, the township is dipping into its surplus fund for $5.5 million towards tax relief (equal to last year’s total), leaving a projected $3.5 million in surplus. “That is a very conservative projection,” says Sheehan. “We are hopeful that it will be much higher.” He adds that this will not affect Plainsboro’s bond rating, the highest in Middlesex County.
The 2005 budget will also benefit from an increase in municipal court fees, which rose $103,”000 between 2003 and 2004 allowing the township to project an increase revenue for 2005. Likewise the 2005 revenues include $308,”000 in new hotel tax revenue. Plainsboro also anticipates state aid remaining at 2004 levels, adding an additional $2.2 million.
“These are particularly challenging times,” said Mayor Peter Cantu. “We are making every effort to be sensitive to our taxpayers. We are taking extraordinary measures to hold down municipal costs and maintain our practice of minimal tax increases. The overall climate, with our revaluation, the burden of school taxes, and no increases in state aid call for such an effort.”
