Looking to whittle down an increase in municipal taxes this year, Plainsboro is hoping to take advantage of a new state law that would allow the payments on state-mandated pension costs to be deferred until 2012.##M:[more]##
Township Administrator Robert Sheehean on March 25 presented Township Committee with a proposed $21.97 million budget, which represents a 5.7 increase over last year. The spending package calls for a 3.26-cent tax increase.
The biggest impact on the budget is state-mandated pension costs, according to Chief Financial Officer Greg Mayers. The township is due to pay a total of $545,”000 — $375,”000 into the Police and Fireman’s Retirement System and $170,”000 into the Public Employee Retirement System.
State law, however, is allowing for towns to hold off on paying those contributions until 2012, by which time, “hopefully, the economy will be more robust,” said Mayers.
Township Committee passed a resolution acknowledging its intention to apply to the program. Township officials will have to appear before the state Local Finance Board to plead their case. Township Committee is planning a budget introduction on Wednesday, April 22, with an appearance before the Local Finance Board on Wednesday, May 13, and a budget adoption on Wednesday, May 27.
Mayor Peter Cantu said the pension cost “represents over half a million dollars on our expenses this year. There is some interest rate expense associated with (the deferral), but in today’s economic environment, it may make sense.”
Mayers said the only conceivable downfall is that “it does tend to stilt the numbers next year,” because the township will not have this avenue available in the 2010 budget.
Approval of the deferral — a 1.5-cent savings — is already included in the 3.26-cent tax increase. “I’m hoping for a favorable response from the Local Finance Board,” said Mayers. “You just never know what to expect when you go down there.”
He added that the only foreseeable problem is that the township is still keeping a surplus of 3 percent, and “they might make us use all surplus before using the deferral program.
In the area of revenues, Sheehan said the township used $3.27 million in surplus to offset taxes. However, the township saw its state aid decrease by $53,”000, and a decrease in revenue from hotel taxes, which fell by $151,”000. Interest on the township’s investments is also down by $372,”000. On the other hand, housing fees are up by $69,”000. Still, the township is taking a “clearly conservative approach to anticipated revenues next year,” Sheehan said.
Employee-related expenses make up 60 percent of the budget, and account for 57 percent of this year’s budget increase, Sheehan said. The budget also reflects the filling of vacant positions in the police department. In 2008, the township reduced its full-time staff by two positions through attrition.
As far as capital expenses, the budget reflects the use of the existing library facility, and officials are assuming $1.5 million for that expenditure, just for the purposes of budgeting right now, Sheehan said. The township will also be continuing with its road maintenance program.
Mayers reported to the committee that the budget process is ongoing and that Plainsboro was still in the process of working to get the budget within the state-mandated cap. Currently, the township’s budget exceeds that cap by $308,”000, he said. “We’re confident we’ll be able to get that down,” said Mayers.
