COURT HOUSE – Saying that Middle Township would face a “one-year aberration,” in 2021, Mayor Timothy Donohue responded to a question during public comment by explaining that the municipality would defer about $800,000 more than usual in transferring school taxes to the school district. This is a practice allowed by statute.
The school system and the municipality operate on different fiscal years, so the municipality can delay up to 50% of the school taxes raised for up to six months, which is the overlap period between the two fiscal years.
It is a practice the municipality previously used. The school system receives its full funding in a manner that meets its fiscal year requirements.
The amount of deferral is different this year. The municipality, which has the responsibility to collect taxes, may, by statute, defer as much as 50% of the collected taxes.
The amount being deferred, in 2021, is significantly less than that, but it is higher than the amount usually deferred in the municipal budget process.
As Donohue explained, the municipality usually defers about $9.6 million for the six-month period allowed. Budget records show that, in 2019, the amount deferred was $9.67 million. For 2021, the municipality will defer $10.4 million, according to the resolution adopted at the Dec. 21 Middle Township Committee meeting.
Donohue said this is a “tool” the municipality is using “in anticipation of a tough year ahead.” On more than one occasion, Donohue hinted the 2021 budget would be challenging, but offered no details.
Donohue Dec. 7 said the municipality would be trying to hold taxes flat.
“We don’t want to raise taxes on people in the middle of this pandemic,” he said.
In remarks during the Sept. 21 committee meeting, Donohue supported the public land sale of 15 properties by emphasizing the importance of the sale occurring this year.
He said, “We are looking at some serious financial challenges, in 2021, due to lost revenue caused by Covid.” The land sale, he added, was a revenue enhancement that would help with the “tough decisions” that will need to be made.
In all these instances, the emphasis was on not allowing the taxpayers, in 2021, to shoulder the full burden of the shortfalls in revenue, in 2020.
