North Bergen property owners will see their tax bills become a little smaller for the next fiscal year.
At a special meeting last week, the North Bergen Board of Commissioners introduced a 2002-2003 municipal budget that calls for a decrease of $800,000 in the amount of money raised by property taxes.
The reduction means a drop of approximately $60 per average home assessed at $140,000. The municipal tax rate will drop from $16.48 to $15.96 per each $1,000 of assessed property value.
It marks the first substantial property tax decrease in five years.
"Since we live in a state with one of the highest property tax rates in the nation, it is imperative that my administration does its part to give taxpayers a break," North Bergen Mayor Nicholas Sacco said. "In the 2003 municipal budget, we have done that without compromising the high level of quality services and programs our residents have come to expect."
The total budget for the fiscal year, which began July 1, 2002 and runs through June 30, 2003, is $59.7 million, down from $61 million a year ago, representing a cut of $1.3 million in the last year.
According to township administrator and chief financial officer Chris Pianese, the tax reduction comes on the heels of some major maneuvering within the township budget, especially with higher expenditures on the horizon.
"Health insurance costs for township employees have gone up 8 percent, or $600,000," Pianese said. "Police salaries have gone up $200,000. A pool feasibility study cost another $50 to $100,000, plus we’re running at a deficit with not having the pool. With all of that, our expenditures are up over $1 million."
There have also been no additional funds given to the township in the form of state aid, which is also a slight setback.
However, the cost-saving methods have included no longer relying on one-time revenue sources as a quick-fix approach; the ability to maintain a low 2.15 percent net debt by collecting interest and dividends on municipal bonds (approximately $460,000), and reducing the amount paid out in the form of tax appeals while reaching an all-time high of 97.05 percent in collecting unpaid taxes.
When Pianese was hired in 1998 as the town’s CFO, one of his main goals was to lower the overall debt. At that time, the township’s debt had reached its peak at $68 million.
"We analyzed our needs and realized that we had to pay off more debt than what we were taking on, and we made a real effort to do so," he said. "We didn’t take any major hits, so we have now been able to lower the debt to $52 million, which is $16 million lower that when we started."
Pianese said that the town’s improving bond rating has enabled the town to have a $9-10 million surplus, $3.9 million of which is being targeted to balance the new budget.
"I’m set to make a presentation to see if we can get an upgrade in our bond rating," Pianese said. "The last time we received an upgrade was 1999. Then, we can sell more bonds."
Added Pianese, "A lot of things have happened in terms of development since our last bond rating in 1999."
Pianese thinks that it was a combination of the three factors: the successful tax collection rate, the decrease in the debt, and the non-reliance on one-time revenues that have led to this decrease.
"These were critical items that hopefully will lead to the stability of taxes," Pianese said.
There could be further decreases on the horizon, especially when the proposed development of Tonnelle Avenue near the old Crown Cork & Seal factory gets underway and other planned development along West Side Avenue goes through.
"West Side Avenue has great potential for development," Pianese said. "So does Tonnelle. We’ve seen some of it already, with Lowe’s [Home Improvement Center] coming in, and that triggered other development in that area. I think there should be a big stability in taxes."
Revenue and Finance Commissioner Hugo Cabrera agreed.
"This decrease continues a trend of tax stability that is very impressive," Cabrera said. "Particularly when considering the fiscal challenges now facing all municipalities throughout the state. The average taxpayer in North Bergen receiving the REAP credit is paying $70 less in municipal taxes today than he did in 1994."