Moorestown Council Adopts Budget With Tax Increase

MOORESTOWN, NJ — The average Moorestown homeowner will pay an extra $45.40 in municipal taxes annually after Moorestown Council adopted a proposed $26,202,000 budget Monday night at town hall. Council adopted the budget, which carries a 2.48 percent tax rate increase, with a 3-2 vote at Monday night’s meeting.

Councilwoman Victoria Napolitano and Councilman Mike Locatell cast the dissenting votes after opposing the proposed tax increase throughout a process that began with a suggested 5 percent tax rate increase. After a series of budget workshops, council cut the proposed increase in half.

“We could do better and not raise taxes,” Locatell said, reiterating his position that taxes shouldn’t be raised to pay for $325,000 to PREIT for Macy's and Lord and Taylor's tax appeals. “Those appeals will disappear in three years.”

Locatell and Napolitano have suggested using more of the township’s surplus to pay the appeals. He also criticized $500,000 in increases for the municipal payroll, saying some of the new hires weren’t necessary; spending $5,000 to plant flowers; and spending $8,000 for lawn maintenance at the zoning office.

“I don’t know why we have to raise taxes for this,” Locatell said.

On the issue of the municipal payroll, Napolitano pointed out that this year’s budget will only cover a $250,000 increase because the year is half over.

“It’s going to go up to $500,000 next year, so we’re setting ourselves up for a tax increase next year,” Napolitano said. “I’m not happy with this budget.”

“There’s no special interest groups here,” said Councilman Brian Donnelly, who voted in favor of adopting the budget along with Mayor Lisa Petriello and Deputy Mayor Nicole Gillespie. “I’m voting to raise my own taxes because it has to be done.”

He said if there are options that allow the tax rate to be lowered, such as selling liquor licenses, next year, he will be in favor of that.

“We can’t do that this year,” Donnelly said. “We’re raising taxes because it’s the right thing to do.”

Read more here: Moorestown Council Introduces Budget With Tax Increase

In all, appropriations are up by $610,000 (2.38 percent) over 2018 appropriations. Salaries and wages are up by a total of $350,409 (4.17 percent), which includes the four new positions and some annual salary increases. The police pension contribution increased $111,192, and the library appropriation increased by $52,980. Ratables increased by $21,075,212 (0.52 percent).

Locatell and Napolitano have both argued in favor of using more of the township's $8 million surplus to cover the tax appeals. Chief Financial Officer Tom Merchel said he would be comfortable taking $2.6 million out of the surplus.

Napolitano said they wouldn't go beyond what Merchel is comfortable with if they took $3 million out of the surplus to pay for appeals, and the township always adds to the surplus throughout the course of the year.

Revenues were up $144,080, and council is already using $2,605,000 of the surplus toward the budget, which is the same amount it used last year. Locatell has said the township will make money off the upcoming sale of liquor licenses.

Appropriations for the water and sewer budget increased by $285,000 (2.71 percent) to $10,785,000. The salary and wages for water and sewer are up by $69,300 (3.59 percent), and group insurance went down by $33,000 (5.75 percent). The Capital Improvement Fund decreased by $447,500, and debt service increased by $552,700 (35.26 percent). This is due to water treatment plant upgrades at North Church Street. The township will use $114,000 in additional surplus for the water and sewer budget.

Council also gave final approval to the obligatory proposed ordinance to exceed the municipal budget appropriation limits and establish a cap bank by a 5-0 vote. It is a proposal introduced by municipalities across the state at budget time.

It is done so municipalities can adopt a budget that contains an appropriation increase that exceeds the 2.5 percent appropriation cap (but only up to a maximum of 3.5 percent); or "bank" for future use, the extent to which their actual budget appropriation increases are less than 3.5 percent.

The budget includes a 1.95 percent appropriation increase, which is about $1.4 million less than if the increase had been 3.5 percent. This ordinance allows the approximately $1.4 million difference to be "banked" so it can be used if needed in future years. The practice is recognized by rating agencies as being a best practice and helps to preserve the bond rating.

Due to discussions over the tax increase and debate about whether there should be an increase or if the township should use its surplus to help keep taxes flat, the budget was introduced later than usual. Thus, the township adopted the budget without state review. It is permitted to do so because it is on sound financial footing.

The state allows municipalities to adopt its budget without a state review twice in a three-year period as long as they are on sound financial footing. In the third year, these municipalities then must adhere to a state review of the introduced budget to ensure the municipalities have been complying with strict state requirements that ensure sound budgeting.

In years in which state review is not required, council must pass a resolution stating the budget complies with statutory requirements. Such a resolution will be considered Monday night.

The resolution confirms that with reference to the following items, the amounts have been calculated pursuant to law and appropriated as such in the budget:

• Payment of interest and debt redemption charges;
• Deferred charges and statutory expenditures;
• Cash deficit of preceding year;
• Reserve for uncollected taxes;
• Other reserves and non-disbursement items; and
• Any inclusions of amounts required for school purposes.

It also confirms that pursuant to the Local Budget Law:

• All estimates of revenue are reasonable, accurate, and correctly stated;
• Items of appropriation are properly set forth; and
• In itemization, form, arrangement, and content the budget will permit the exercise of the comptroller function within the municipality.