COURT HOUSE – The over-$20-million budget the Middle Township Committee introduced March 17 called for a 5.63-percent increase in the local purpose tax levy. On April 17, the governing body lowered the levy but still approved a 4.93-percent increase.
That change left the increase still well above the expected 2 percent cap that limits annual tax increases. As auditor Fred Caltabiano, of Bowman and Co., explained, state cap limits can be exceeded through the use of savings in the township’s Cap Bank, due to increases in expenses that are considered outside the cap rules. Both sets of criteria were used to justify the 4.93 percent in the 2017 budget as adopted.
After the introduction, Committee member Timothy Donohue objected to the size of the one-year increase and proposed a series of potential adjustments that could bring the growth of the tax levy down to the 2 percent cap level.
Saying that the budget as introduced was a step back to a “time of uncontrolled spending,” Donohue said he could not support it.
The amendment to the budget did adopt some of the adjustments Donohue proposed in March, but the increase was still too great to garner his support. The adopted budget passed on a party-line 2-1 vote.
The narrative of support for the tax increase is simply stated. The township has experienced several years in which the local purpose tax levy remained flat.
“It was time for a little increase,” Deputy Mayor Jeff DeVico said. DeVico argued that the township needed to raise salaries for many of its non-union positions to remain competitive in the job marketplace.
The salary increases plus rises in uncontrollable expenses such as health insurance and state pension obligations required an increase. “Five years of no increase caught up to us,” DeVico said at the March meeting.
The narrative against the size of the increase is equally straightforward.
Salary increases, no matter how justified, need to be phased in over multiple years to prevent spikes in the tax rate experienced by property owners.
Some uncontrolled expenses rise every year, and part of the budget process has to be finding savings and efficiencies elsewhere to off-set them.
Donohue seemed willing to compromise on a tax increase that stayed within the 2 percent cap. “We could have greatly reduced the one-year impact of this spike in taxes, while setting us on a course to rein in further spending increases going forward,” Donohue said in an email after the meeting.
Donohue warned that there were “down the road” consequences of the adopted budget.
“Our negotiating position with respect to the union contracts is now out the window,” he said. “We have been telling them for years now that the cap limited what we can do,” Donohue said.
One of the drivers of the increase in the hike was a new resolution, also passed 2-1, that called for an increase in some salaries for nonunion positions.
Donohue argued that the increases incorporated in the budget for non-union employees meant the township was experiencing a 7.1 percent growth in salaries and wages for that group.
He then noted that the recent settlement agreement raising the salaries of three statutory officers, who had threatened legal action due to a disparity of their salaries and that of the new chief financial officer, brought the overall one-year growth in total salaries and wages for non-union employees to 10 percent.
Donohue said he was not arguing that the employees did not deserve a higher wage, but argued that the township cannot do this all in one year.
In addition to the salary issue, Donohue said he could not support a budget that called for use of “emergency” funds in the Cap Bank. “We promised the residents that we would not use these funds unless there was a real emergency,” Donohue said.
He was speaking of a natural disaster or a large financial collapse similar to 2008. “This is not that kind of thing,” he added.
The budget, even with its almost 5 percent increase in the local purpose tax levy calls for using $253,000 of funds from the Cap Bank, most of which had not yet reached the three-year rollover point.
Mayor Michael Clark called the budget “A good budget that is sustainable.” He pointed to areas of expense beyond the township’s control and expressed regret that the committee could not physically “get together more” to discuss the budget.
This is a comment frequently heard in township meetings referring to the fact that the three committee members cannot meet outside of a workshop or committee meeting to discuss issues like the budget.
They otherwise hold their “discussions” through a third party like the business administrator.
Clark did not explain what prevented the committee from scheduling extra meetings if there was a desire to discuss ideas regarding the budget.
The full budget as adopted along with a copy of Caltabiano’s presentation will soon be placed on the township’s website.
To contact Vince Conti, email vconti@cmcherald.com.
Cape May – Governor Murphy says he doesn't know anything about the drones and doesn't know what they are doing but he does know that they are not dangerous. Does anyone feel better now?