Possible Tax Rate Increase Cut In Half; More Work To Do On Budget

MOORESTOWN, NJ - A possible 5 percent tax rate increase that was included in the draft budget for 2019 has been cut in half, but Moorestown Council’s work to cut that even further continues. As a result, though, the introduction of a proposed budget has once again been delayed.

The possible tax rate increase has been cut to 2.48 percent, according to a memo from the township manager to town council that was shared with the public during a budget hearing at town hall Wednesday night.

If proposed as it stands, the owner of a $454,000 would be faced with a $45.40 increase in taxes, as opposed to the $90 that would have come with a 5 percent tax rate increase.

That increase would bring the local property tax total to $1,879.69 for the average Moorestown homeowner. The 5 percent proposal would bring the local property tax total to $1,925.10. The draft budget is down to $26,055,000, from the previous suggestion of $26,477,000.

See related: Moorestown Draft Budget Brings Almost 5 Percent Tax Rate Increase

Eliminating an increase altogether remains council’s ultimate goal, but that would require appropriation cuts and/or revenue increases amounting to $400,000, according to township officials.

While council members began discussions on what could be done, the meeting ended at 9 p.m. when a council member had to leave for a prior obligation, after about an hour of discussion. The budget hearing began at 8 p.m., after council went into closed session to discuss affordable housing issues.

With more left to discuss, another budget hearing was scheduled to take place before the next regularly scheduled council meeting on Monday, May 20, 5:30 p.m. at town hall. This means the proposed budget won’t be introduced on Monday night, as previously planned.

(On Wednesday night, council members had said they would meet on Wednesday, May 22, 6 p.m., but on Thursday, the township announced the hearing would take place on May 20.)

The budget was originally scheduled to be introduced on May 6, but that introduction was postponed at the April 29 meeting. An extension has not yet been granted, according to Township Manager Thomas Neff. The state may send a letter asking the township to set a date to introduce, and if it isn’t adopted by the fall, the state could end up adopting the budget for the township. Neff doesn’t expect that to be the case.

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. Councilman Mike Locatell suggested using some of the township’s surplus, which was over $8 million at the beginning of the year, to pay for the tax appeals, and replenishing the surplus with the sale of liquor licenses and licenses for package goods.

Council used the surplus to pay for the township’s obligation to the tax appeal last year, according to Chief Financial Officer Tom Merchel.

“When I was at the state, we used non-recurring sources to pay for recurring expenses,” Neff said, adding that works for the short-term, but is not sustainable and hurt the state’s credit rating.

Locatell suggested that since the tax appeals will disappear from the budget, it’s not a recurring expense.

“We shouldn’t use the surplus for salary increases because that will be in the budget forever, but tax appeals won’t be,” Councilwoman Victoria Napolitano said.

Mayor Lisa Petriello said the township has used the surplus to maintain a flat tax rate in the past, and suggested the township might be able to take from the capital reserve instead of the surplus.
However, Merchel said there wouldn’t be enough in the reserve for that. He also said it was possible that the township would see another revaluation before the tax appeals disappear from the budget, and that the township might have to budget for any increases that would bring.

Another topic discussed during Wednesday’s budget hearing, which was the fifth workshop on the issue, included eliminating the township’s policy of free parking on Main Street in December.
Doing so would not just keep people moving during the holiday season, it could bring in as much as an additional $5,000 in revenue for the township, Neff said.

Council was open to this idea, but was not as receptive to an idea to increase parking fees from $1 to $2 an hour. Council members also said they would like to hear from the Moorestown Business Association (MBA), as well as individual businesses, on the proposal to eliminate free parking.

Petriello also noted that the MBA has offered a matching donation of up to $25,000 to help the township move forward with improvements along Main Street. This includes moving blue stone planters that aren't aligned with the parking spots, as well as for benches and trash cans.

Locatell said this work could help pave the way for greater ADA accessibility, including ramps, which is a need for the township. That work would not be covered by MBA's donation, but it presents the opportunity to move on it, Locatell said.

Locatell also said he'd like to see a chart detailing employees' salaries to see if the suggested increases are necessary.

The township has also inserted $400,000 into the budget for the cost to improve the township's softball fields. Neff said that number is just a placeholder, and not indicative of what the township will spend.

"It's just to note that it's something council has said they want to move forward with," Neff said. Read more here: MYSA Packs Council Room, Makes Plea For New Fields

No official action was taken at the hearing.