21 Aug 2014
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South Brunswick Municipal Budget to Carry No Tax Increase

Township eliminates tax increase without cutting any services.

South Brunswick Municipal Budget to Carry No Tax Increase

After months of work to reduce a municipal tax increase, the Township Council is expected to finalize a budget plan that will not raise the tax rate at tonight's meeting.

, from 72 cents per $100 of assessed valuation to 75 cents. The council has since reduced the 3-cent , and has now cut the budget to a zero increase.

"I think this was very important for residents. There's a lot of unemployment problems and concerns with people's houses facing foreclosure, so things aren’t great in terms of the economy," said Mayor Frank Gambatese. " it could've been catastrophic for some residents if we also went up. It was very difficult for us to make progress on this, but I think all of the council, (Chief Financial Officer) Joe Monzo and (Township Manager) Bernie Hvozdovic did a great job getting this increase down to zero."

For the past several months, discussions were held with the township's various department heads looking for possible savings, but ultimately the South Brunswick’s services will remain intact without any significant cuts. The operating expenses for each department are expected to remain at 2011 spending levels, according to Councilman Joseph Camarota.

"We know our residents didn't want to see an increase, so the question was how do you do that without cutting back on services," Camarota said. "It was a juggling act. I know some people are concerned about this budget moving forward, but there's some additional help coming next year. We'll get some help from the pension and health reforms, the economy is starting to turn around, and we're going to be looking at reorganizing some of our departments. I think we can find some redundancy that we'll be able to eliminate and save money through, so that will be the goal for next year."

Getting from a $1.9 cent increase to zero was mainly accomplished through two sources of funding. The township received money back from the state for cleanup of a landfill on New Road, and used money through the Affordable Housing Trust Fund for prior work by township employees.

In 1984, the state pushed for a cleanup of the landfill on New Road, which required the township to put up about $400,000 until the site was cleaned, according to Gambatese.

"Unbeknownst to anybody, that site was determined to be clean by the state two years ago and nobody did anything about it," Gambatese said. "So (Hvozdovic) checked and found out it was deemed clean and sent a letter to the state. Then they informed us that they will be returning about $280,000 to us, so that's nearly a tax point right there."

The township also was able to use about $547,000 from the affordable housing trust fund to bring down the tax increase.

A reform passed under the Corzine Administration and signed into law in 2008, gave towns four years to spend their affordable housing trust fund money or lose it. South Brunswick had close to $8 million remaining in the fund. The township's Council on Affordable Housing (COAH) consultant informed the council they could dedicate money to fund previous work by township employees on phase three of the affordable housing plan going back to 2005.

"The township attorney, planner, and others all were working incessantly on that and put a lot of time into it, so we found out we were allowed to bill that time they spent working on affordable housing to COAH," Camarota said. 

Other areas of savings are expected to come from the council members eliminating a 7 percent raise for themselves, and from keeping departmental operating expenses at the same funding levels as 2011. The township will also take about $40,000 from the snow budget, leaving about $100,000 in the fund for the rest of 2012.

A major area of importance for the council was to avoid cutting spending on the backs of municipal employees through layoffs and furloughs. Over the last five years, South Brunswick is down 56 positions from layoffs and attrition, which reduced the township workforce from 295 people to 239 people.  

"For two years our employees had no pay increase, plus furloughs, so that's equivalent to a reduction in pay," Gambatese said. "We didn't want to do that again and we didn't want to have major layoffs. We can't let anyone else go without sacrificing major services. I was pleased when we got the increase down below 2-cents, so to get to zero made me really happy and that's important to do during these times. I see things starting to turn around with more new businesses coming in, so we hope this is the end of the economic troubles and we can start to move forward."

A public hearing on the budget that was introduced last month with a 3-cent tax increase will be held at tonight's council meeting, in accordance with state law. Following the hearing, the council will amend the introduced budget to reflect the changes that have been made since the introduction. The amended budget with no tax increase will be brought back for a public hearing on April 24, at which point the budget is expected to be adopted.

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