Middle’s Budget OK’d 2-1

COURT HOUSE – Middle Township adopted its $22-million general fund budget for 2018 on a 2-1 vote that split along party lines. Democrats Deputy Mayor Jeffrey DeVico and Mayor Michael Clark voted for the measure while Republican Committee member Timothy Donohue cast a no vote.
The budget increased the amount to be raised by the local purpose levy by 2.5 percent, or $0.01 to $0.482 per $100 of assessed value. It calls for $13.24 million to be raised from taxes.
A $5.1-million sewer utility budget was also adopted. The township committee had already raised rates for commercial users of the utility for 2018 and kept residential rates the same as 2017.
The presentation on the budget was made by township auditor Fred Caltabiano.
Caltabiano pointed to several expenses which he said led to the increase in the local tax rate. These included another year in which the state-mandated pension payment increased significantly.
He also noted that the recent contract the township entered into for maintenance of many township properties imposed an added burden on the budget in its initial year. The contract is part of what Caltabiano called a beautification program endorsed by the governing body.
Concerns about the potential impact on the general budget of higher fees from Cape May County Municipal Utilities Authority (MUA) charges were dismissed by Caltabiano. 
“This is not the reason the tax rate went up,” he said.
The issue of the MUA charges came up again when Donohue explained his vote at the end of the meeting.
Caltabiano said that the new tax rate would mean an increase of $2 per month for the average home in Middle Township. That was a number that may have little meaning for most property owners since the value of homes in the township varies greatly.
Caltabiano’s use of that figure as a way to show that the tax rate increase will have a minimal impact on residents again fueled some of Donohue’s later remarks.
In explaining his no vote on the budget, Donohue talked of the township as the one place that should hold the line on tax increases. He argued that taxpayers see small increases in budgets year after year raising the school, county, and state taxes. “A little bit here and a little bit there adds up to real money,” he said.
“For two years now there has been a growth in the budget and a growth in the tax levy,” Donohue said. “It’s time to move the goal posts back to where they used to be.”
The one-cent increase in the tax rate is resulting in an extra $323,000 in the budget. Donohue said he felt that a zero increase year was “attainable” this year following the 5 percent increase in the tax levy last year.
DeVico responded strongly to Donohue’s remarks saying “attainable how?” DeVico asked why Donohue had not advanced ideas for how to attain a zero increase during the budget process. 
Donohue replied that he had done so in a series of emails.
There is limited ability for policy discussion among the members of the committee outside of public meetings because any two of them together constitute a quorum, according to the state’s Open Public Meetings Act, also known as the “Sunshine Law.”
While Donohue cited five years of zero increases in the tax rate when the committee was under Republican control, DeVico countered by saying that long stretch without a tax increase left the township in need of additional revenue.
One issue that did resurface in Donohue’s remarks was a reduction of $150,000 in the indirect costs paid by the sewer utility to the general fund. Donohue cited that money as a source of funds that could have helped offset an increase.
Earlier during his budget presentation, Caltabiano had argued that the cut in the contribution from the sewer utility was necessary because the sewer utility would otherwise have been in a deficit which would have involved a bailout by the general fund.
No discussion was had on what led the township to the decision to cut the indirect cost payment from the sewer utility rather than raise the rates on the customers of the utility enough to cover the $150,000 indirect cost payment.
Caltabiano said that the costs of the general fund exist whether or not the utility pays the indirect costs. That suggests a flexible view of indirect cost calculations and allocations which should be driven by confirmed analysis.
Donohue pointed to the fact that “real work” is done by employees of the township on behalf of the sewer utility which historically was the rationale behind the indirect cost calculation. “Was there less work this year?” he asked.
The discussion of the sewer utility payment was brief. It stood as one example of a disagreement on budget strategy.
Donohue felt that the local purpose tax increase could have been avoided. 
DeVico and Clark felt they were voting to adopt a “good budget” that met the needs of the community with a minimal added burden to the tax rate.
DeVico said Donohue was “voting no just to say no.” Donohue countered that the cumulative impact of small increases at all levels of taxation was the equivalent of “death by a thousand cuts.”
To contact Vince Conti, email vconti@cmcherald.com.