The mayor and Town Council have adopted the 2012 municipal budget, a $46.7 million spending plan that includes no municipal tax increase, a first for this administration. The budget, introduced last month, has been reduced from $46.8 million.
“You have our assurance that we worked very hard on the 2012 budget to keep it as lean as possible while at the same time continuing to provide the same level of services,” said Councilman Robert Costantino at the council meeting April 10. “We are hoping that trend will continue.”
The lack of new taxes does not result from an artificially low tax rate, said several officials.
“We didn’t make that move without being absolutely sure that it wouldn’t have an adverse affect on next year’s budget,” said Deputy Mayor John Bueckner.
No one from the public spoke out in favor or against the adoption during the public hearing.
The budget runs from January of 2012 through this coming December. The municipal budget is only one of three components that influence how much someone pays in taxes each year. Property owners also pay toward the school budget, which will be voted on next week and includes an average $76 tax increase per property owner and the county budget, which includes a $66 tax increase for the year.
“We have become leaner over the last number of years.” – David Drumeler
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The budget does include a number of increases in certain line items, such as $91,000 for the Meadowlands tax sharing payment, a $188,000 increase to police pension bills over 2011, an $85,000 increase in fuel prices, a $275,000 increase in employee retirements, and a $200,000 increase in the Municipal Utiltities Authority. Some departments recieved some of their wish list items on the budget that included items such as generators. The Recreation Center continues to operate at a loss but the town pays the debt down on an annual basis.
Counting on the surplus
“We had some additional cushion left in the budget with regard to surplus,” said Town Administrator David Drumeler. “We utilized a little bit more of that.” The town had higher than anticipated revenues from the hotel tax of $50,000, an increase in the parking tax by $200,000, which the town gets from the lot at the Frank R. Lautenberg Rail Station, and an increase in construction contracts of $360,000. The administration also expects tax ratables to go up this year.
“I’m not opposed to flat tax as long as justification is there,” said Director of Finance Nick Goldsack. He said that he is against a zero increase if there is no way to move forward with it in the future.
“I feel comfortable that we will have the ability to replenish close to the amount of surplus this year,” said Goldsack. He said that the previous administration adopted a flat tax seven or eight years in a row but then was hit with a structural deficit. As a result Goldsack has some degree of reluctance with regard to a flat tax but feels confident about this budget.
“The worst thing you can have is a spike,” said Goldsack. “The most important thing taxpayers look for is something consistent and something realistic.”
“We didn’t plan it for just this year,” said Mayor Michael Gonnelli. “We are looking at three, four, five years down the row to keep taxes very stable. It wasn’t a ‘one-year before election’ scam.”
Moving employees to state health benefits
While the town saw an increase in health benefits in last year’s budget, this year the town negotiated contracts that moved union employees on the police force and in the DPW to the state health plan, which adds up to $300,000 in savings. Employees for the first time will pay into the health benefits plan. The state plan will be phased in over four years and the amount an employee pays into it is determined based on salary. For an employee that makes $45,000, they will pay 2.25 percent of their salary into the plan and that will go up each year until they pay 9 percent.
“We know that [the savings] will double next year, triple then quadruple,” said Drumeler. The town was paying on average $36,000 per employee on the family plan and anticipates that amount will go down by $10,000.
Drumeler said that the town also settled one of the lowest union contract wage negotiations. In previous years the town had settled on 3.7 to 3.8 percent salary increases while this year it was half that according to Drumeler.
Several officials thanked the employees during the council meeting for working with the administration to help achieve the budget goals. Their dedication to the town and to their jobs was commended.
“We have become leaner over the last number of years,” said Drumeler. “We try to do more with less [and] have this pretty well fine-tuned.”
Adriana Rambay Fernández may be reached at afernandez@hudsonreporter.com.