Moorestown Council Introduces Budget With Tax Increase

MOORESTOWN, NJ — The average Moorestown homeowner will pay an extra $45.40 in municipal taxes annually if the proposed $26,202,000 budget that was introduced Monday night passes final approval.

The contentious discussion over the proposed tax increase in Moorestown continued Monday night as the 2019 municipal budget passed introduction by a 3-2 vote by members of council.

Councilwoman Victoria Napolitano and Councilman Mike Locatell continued to argue a tax increase is not necessary as they voted against the proposed budget Monday night at town hall.

Mayor Lisa Petriello, Deputy Mayor Nicole Gillespie and Councilman Brian Donnelly voted in favor of the proposed budget, which includes the 2.48 percent tax rate increase.

Napolitano and Locatell voiced their disapproval at the $250,000 in new hires the township was considering.

“That’s basically the budget increase,” said Locatell, who reiterated his belief that council should’ve used more of the surplus to keep the tax rate down.

“That’s $252,000 for this year, but that’s only for half the year,” Napolitano said. “That will double next year, so I guess we plan on raising taxes again next year.”

Gillespie said council did reject some of the new proposed hires, but people aren’t getting all the services they should be getting. She said the township has a lot of stormwater drainage problems, but Napolitano said they weren’t opposed to the hiring of a stormwater management supervisor. Locatell said the hiring of two part-time zoning enforcement officers wasn’t necessary.

Petriello, Gillespie and Donnelly have argued that the Public Works Department is in need of employees, as it dropped from 30 dedicated employees in 2013 to 22 the following year, and has remained at that number since.

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).

The increase was initially suggested in part to cover the impact of tax appeals by Macy's and Lord and Taylor's. The township must pay $325,000 each year for the next five years to PREIT for Macy's and Lord and Taylor's tax appeals, beginning this year. The tax appeals will be completely paid off in 2023, and will disappear from the budget beginning in 2024.

When first proposed, the draft budget included a nearly 5 percent tax rate increase. After a series of budget workshops, council cut the proposed increase in half.

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.

“Our CFO has said relying on a windfall is not a way to budget,” Donnelly said.

“What happens after the tax appeals go away,” Locatell asked. “Will you cut taxes? That’s very rare. We’ve done it, but most of the time when governments start raising taxes, they don’t go back down.”

Locatell referred to last year’s $25,592,000 budget that included a 1.22 percent tax decrease. At the time, the council was made up of a majority of Republicans. Now, the Democrats hold a 3-2 edge on council.

“You’ve done it, and we might too,” Donnelly said.

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 approved the obligatory proposed ordinance on introduction 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.

Moorestown's proposed budget will include a 1.95 percent appropriation increase, which is about $1.4 million less than if the increase had been 3.5 percent, according to the agenda packet on the township's website. This ordinance will allow 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.

Council also approved a proposed resolution to continue the 2018 tax rate of the Open Space, Recreation and Farmland and Historic Preservation Trust Fund of one cent per $100 of assessed property value for 2019 by a 5-0 vote.

The public hearing and final vote on the budget is set for July 8.