No Tax Increase In Moorestown's Proposed Budget Amid Pandemic

MOORESTOWN, NJ — As businesses struggle to reopen, unemployment remains high and people across the country are uncertain where their next paycheck will come from, Moorestown Council introduced a proposed budget that would see taxes hold steady for the next year.

Moorestown Council unanimously approved a proposed $26,480,000 that carries no tax increase Monday night. The overall budget is up $278,000 (1.6 percent) over last year.

The proposed utility budget is $10,450,000. The public hearing and final vote on the proposed budget will take place Sept. 14.

Township Manager and Chief Financial Officer Tom Merchel had previously suggested increasing taxes to offset a possible $548,000 loss in revenues, but council didn’t want to see taxes raised when people are struggling during a pandemic. That number includes $248,000 in "at-risk" revenues and $300,000 in various other sources.

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As a way to keep taxes down, the township is further tapping into its fund balance, or surplus. According to Merchel, the township's surplus at the end of last year was $8,211,878. To balance the budget, the township will be using $3,215,000 of that surplus, which is $610,000 more than what was used last year.

Council members Victoria Napolitano and Mike Locatell had suggested tapping into the surplus last year, when taxes were increased by 2.48 percent. It wasn’t done at that time, but the situation is much different this year, Mayor Nicole Gillespie said.

“It was different last year than it is this year,” Gillespie said. “You can’t raise taxes in a year with record unemployment. That would be irresponsible.”

“It would be irresponsible, but that’s what we thought last year,” Napolitano said. “Why is it more responsible to use this mechanism this year?”

Locatell said that when he and Napolitano suggested tapping into the surplus last year, it went against Merchel’s advice as chief financial officer.

Locatell asked Merchel what his advice is this year, and Merchel said that he suggested a tax increase, and he stood by it.

Deputy Mayor Brian Donnelly said last year was the time to raise taxes, but the pandemic calls for compassion from the township, which means not raising taxes.

Gillespie pointed out that the surplus is there for emergencies, and Councilman Lisa Petriello said “this is the rainy day.”

“We need it this year, it wasn’t needed last year,” Petriello said. “The pandemic is out there now, and money isn’t coming in the same way it was.”

Taxes were raised last year in part due to Macy's and Lord and Taylor's tax appeals. The budget continues to carry $850,000 from that judgement, according to Merchel. The township will need to raise $325,000 each year for the next three years to pay for the settlement, and $525,000 each of the next two years to pay for the appeal.

Despite the argument whether the surplus should've been used last year, all five members were in agreement about using the surplus to hold taxes steady this year.

In addition to the projected revenue loss and appeal payments, the township's sanitation contract increased by $160,000 from last year. The reserve for uncollected taxes increased by $283,000 due to a decline in last year's collection percentage. The township anticipates an increase of $829,000 in unpaid taxes this year.

Pension contributions increased by $108,000, largely for police members, and the required library appropriation increased by $71,000. Debt service went up by $207,000, but that was offset by $165,000 in revenue to pay off the note principal.

Salaries and wages decreased by $49,597 (0.57 percent), as positions that have become vacant are not being filled. Group insurance premiums went down $140,500 (6.13 percent), and the township's capital improvement fund contribution went down by $145,000 to offset other increases.

The statewide budget remains uncertain. Gov. Phil Murphy delivered his initial budget address in February, before the pandemic hit. He is expected to deliver a second budget address later this month, before Moorestown Council makes a final decision on its municipal budget.

Moorestown Council also unanimously approved the proposed ordinance to exceed the municipal budget appropriation limits and establish a cap bank Monday night. 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 Council has determined that a 3.5 percent increase, amounting to $177,816.20 in excess of the increase in final appropriations otherwise permitted by Local Government Cap Law, is advisable and necessary. The total increase would be $622,356.70. The public hearing and final vote on this proposal is set for Aug. 24.

Council also approved a pair of budget resolutions. The first continues the tax rate of the Open Space, Recreation and Farmland and Historic Preservation Trust Fund of one cent per $100 of assessed property value for 2020.

The final resolution was a certification of compliance with the United States Equal Employment Opportunity Commission's "Enforcement Guidance On The Consideration Of Arrest And Conviction Records In Employment Decisions Under Title VII Of The Civil Rights Act Of 1964.

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