There is a Better Path to a Zero Tax Increase Budget

As we move towards the final vote on our budget for 2016, I am gratified to see that a flat levy, still below the all-time high of 2011, is being proposed. However, I believe the path we have taken to get here is both short-sighted and imprudent and could thwart our long-term goal to actually start cutting taxes for our beleaguered taxpayers.
From 2001 to 2011, the municipal levy in Middle Township rose, on average, by 11.5 percent per year.  At a time when the overall inflation rate in the United States averaged only 2.7 percent, the burden on Middle Township taxpayers doubled. Middle Township was becoming a poster child for out-of-control spending and the explosive growth in property taxes in the state of New Jersey.
Changing that spending trajectory has not been easy. I recall sitting down with our auditors in 2012.  They automatically assumed we would raise the levy by 2 percent and seek other ways to spend money outside the 2 percent cap. This approach is what led to New Jersey becoming one of the most over-taxed states in America. It took a new way of thinking, but over the last four years we have kept the municipal levy below the all-time high of 2011. If those 11.5 percent increases had continued for the past four years, our current $12.3 million levy would now be over $21 million. We slammed the brakes on runaway spending. But more important than doing it, was how we did it.
From 2012 to 2015, we accomplished the zero tax increase the right way. Through hard work, tough decision-making and bold, innovative approaches, we changed the face of government in Middle Township for the better, without raising your taxes. The changes we implemented were meant to help us reduce spending year after year; bending the cost curve of government downward going forward. How did we do it?
We laid the foundation by doing an affordable reassessment of all properties in 2012 that greatly reduced our tax appeals and established fair market values for our residents.
We did it by reorganizing and restructuring many Township departments to save hundreds of thousands of dollars, without reducing the quality of the municipal services we provide.
We did it by reducing the numbers of lawyers and engineers under contract and controlling the spending of those still employed, saving over $300,000.
We did it while improving the Township’s bond rating and reducing the Township’s debt.
We did it by conducting a full audit of the policies and practices in our Finance Office, bringing more accountability, transparency and best practices to an office that handles approximately $90 million a year.
I could go on, but most importantly, we did it all with a long-term view to reducing future spending and debt, while putting sound plans in place to address our capital and infrastructure needs.
Important questions must be addressed, as we move into 2016 under a new mayor, with a new chief financial officer (CFO) and newly-appointed township auditors. Are we making sound financial decisions that help us control spending, reduce debt and improve government services for the long haul, or are we using one-time gimmicks and dubious assumptions to get to a politically-motivated destination? Our auditors, CFO and business administrator did the job they were assigned. They worked hard to deliver the zero tax increase demanded by Mayor Clark. It then becomes our job, as your elected officials, to decide whether this budget endangers the important reforms we have put in place and whether or not it threatens our long-term financial stability and well-being.
We see no new reforms here. No restructuring or sustainable cost-cutting steps being proposed to further our mission of long-term spending reductions.  There is no new plan for more efficient government operations, no real vision for continuing to bend the cost curve of government downward.  Maybe that explains why our new auditor’s 2016 budget presentation was less than five minutes long.
Instead we are offered short-sighted, one time only, sleight of hand, employed to fill a budget hole for just one year.  None of these steps helps us going forward.  In fact many of these moves could hamper our ability to balance our budgets in years to come. In my opinion, the zero tax increase for 2016 is being achieved by accepting a collection of risky assumptions and the ill-advised delay of a significant debt payment.
Taken individually, one might find a justifiable argument for some of these steps.  However, taken as whole, they paint a picture that ignores the long-term financial health of our community. One time, stopgap measures, are just that, one time.  They leave us with a growing void in the next year’s budget that becomes increasingly more difficult to fill without a significant hike in taxes. This budget contains hundreds of thousands of dollars in these “one time” line items. Sure, they make us all look good politically in the short term.  But at what cost to our long-term financial stability?
Believe me, no one likes a zero tax increase more than I do.  This is my fifth year on Committee and this would be the fifth consecutive budget that kept spending flat. But there is a better path to zero than this budget provides. We have proven that over the last four years. It takes the courage to make tough decisions. It takes the ability to think outside the box and move away from the status quo. You have to be willing to say no. You need a clear vision and a core philosophy that guides and bolsters your long-term planning. It isn’t easy. But that’s what real leadership is all about, making the tough calls, in order to make a real and lasting difference.
Ultimately, the paramount consideration here should always be the long-term effect of the budget on our taxpayers, not the short term gain in popularity for the politicians.
Donohue is a committeeman for Middle Township.