‘Devaluation’ of Properties Producing 9.2 Cent Tax Hike in Lower

VIILAS — Lower Township Council introduced its 2010 budget Tuesday, which features a 9.2-cent hike in the local purpose tax rate due mainly to a revaluation of properties that decreased the total valuation of properties in the township by $613,000.
The bulk of the tax rate increase is a consequence of a revaluation of property values undertaken at the request of homeowners who found the valuation of their homes far above current sale prices. The decrease in the assessed valuation is 13 percent.
The township budget portion of the tax hike amounts to 2.6 cents which could be decreased by council by the time a public hearing for the budget is held May 3 at 7 p.m.
The proposed budget for 2010 is $24.7 million, up from $24.6 million in 2009, an increase of $118,000.
The local tax rate is increasing from 36.6 cents per $100 of assessed value to 45.7 cents.
The local purpose tax levy is $18.7 million compared to $17.2 million last year, an increase of $1.5 million or 8.8 percent. According to Township Manager Kathy McPherson, the increase is due to decreases in state aid and local revenues and increases in salaries, debt service, pensions and reserve for uncollected taxes.
The township lost $393,000 in state aid and saw a $51,000 increase in dental insurance premiums.
One cent on the tax rate is equal to $409,000 in budget expenditures.
The township completed 2009 with a surplus of $2.9 million. Of that balance, $1.9 million is being applied to this year’s budget leaving a balance of $1 million.
Auditor Leon Costello said salaries are increasing 1.72 percent. Other Expenses are increasing 3.5 percent mostly due to pension and health benefits, he said.
A sour national economy has decreased local revenues by $183,000.
Gov. Chris Christie has signed into law a requirement municipal employees pay 1.5 percent of their health benefit costs.
Costello said that would have no effect on the township until 2011 because it does not start until current employee union contracts expire.
“We’re in fairly good shape strictly because of the fact council decided not to fill positions,” said Mayor Michael Beck.
Resident Fred Long asked how $500,000 could be cut from the budget. Costello said if council wanted to reduce spending by $500,000, it would have to prepare a list of whom it wants to lay off.
“Or how many programs you want to cut,” added Councilman Wayne Mazurek.
“Once you cut something like that, it’s not coming back,” said Beck.
Layoffs would have a minimal effect on this year’s budget, said Costello, since the budget will not be approved until May and most of this year’s budget would be spent by that time.
Beck compared the township’s employee contract situation to an over inflated tire with a little air being let out gradually rather than poking a big hole in the tire at one time. He said council began trimming staff numbers last year by attrition.
Mazurek asked residents to decide what services they could do without if layoffs are favored such as trash collection, recycling, recreation and senior citizen’s centers.
“We’re not going to be able to run those services the way they need to be run by eliminating more people,” he said.
McPherson said council would have to cut $1 million from the budget to produce a zero percent tax increase.
Resident Robert Rizzo said he and his wife are losing $1,200 from the elimination of state tax breaks while their medical insurance is increasing by $114 per month.
He said his pension has not offered a cost of living increase in the past 22 years. He said council may need to do something drastic to avoid a tax increase.