Potential Tax Hike In West Orange Chopped Down – But Is It Enough?

WEST ORANGE, NJ — One of the most contentious budget seasons in recent West Orange history took another turn during Tuesday’s town council meeting. The question now: Is a potential 5.8 percent municipal tax increase still too high – or is it making the best of a bad situation?

Most of the meeting was devoted to a public hearing and discussion about the proposed 2023 town budget, which contains a tax hike that many residents have been loudly criticizing over the past few months.

That increase – which once stood at more than 16 percent – was reduced to 6.74 percent after administrators went back to the drawing board and did as much “chopping, slicing and dicing” as possible.

An amendment to the budget introduced to the council on Tuesday would adjust for extra state aid and grant money, and further reduce the tax increase to about 5.8 percent, according to chief financial officer John Gross.

The proposed tax hike would apply to the municipal portion of a West Orange resident’s property taxes, which are generally made up of three parts: school, municipal and county. Read More: Average Property Tax Bill In West Orange Is Growing, Latest Data Shows

The West Orange Board of Education approved the district’s school budget in May, clearing the way for a 2.66 percent hike to the school portion of local homeowners’ property taxes. Read More: Tax Hike Imminent As West Orange School Budget Hits Finish Line

Essex County Executive Joseph DiVincenzo Jr. presented an $885.4 million budget for 2023 earlier this year. Homeowners would see the county portion of their property taxes rise by about 1.5 percent under the proposed spending plan, his office said. Read More: Tax Hike Expected In 2023 Essex County Budget, Official Says

This year’s proposed municipal budget represents about 26 percent of a West Orange resident’s property taxes, with 61 percent going to the board of education, 12 percent going to the county, and 1 percent going to the library tax levy, according to figures presented Tuesday.

When asked about a potential deadline for the budget to be finalized, Gross said that the town will “be fine” if the proposed spending plan is adopted in August.

Watch Tuesday’s full budget slideshow below (video is cued to the presentation).

WEST ORANGE TOWN BUDGET: RESIDENTS SPEAK

During the public comment portion of Tuesday’s meeting, some residents said the proposed municipal tax hike is still way too high.

Phil Litwinoff, a CPA and financial officer, said the budget that has been put together “is not appropriate” for the township. “In terms of the overall budget, a 6 percent [increase] is still outrageous,” Litwinoff said.

Watch their comments below (video is cued to the public comment portion of the meeting).

Speaking after public comment, Council President Tammy Williams said that like other homeowners in West Orange, she was “shocked” when the 16 percent increase was first proposed.

The new proposed tax hike of 5.75 percent is still “unacceptable,” she said – and that’s something the council will need to consider moving forward.

“I think we really have to do an overhaul on which we're attempting to do with all of our fees that come into the municipality,” Williams said, mentioning the possibility of charging riders a fee to use the township’s jitney service, which is currently free.

“We are all in agreement,” Williams said. “Each of us are homeowners that sit behind this dais. We feel the same burden and pain that each of our residents do.”

Councilwoman Susan Scarpa also questioned the finances surrounding the town’s jitney service and supported rolling out a fee for riders.

“I don’t feel it’s fair for all of our residents who don’t use the jitney to be subsidizing people who work in Manhattan and have good jobs,” Scarpa said.

Scarpa also said the town’s real estate holdings are having an impact on the municipal coffers.

“I think most of us who have been looking at it for a while, realize that we are in this predicament because of the $30 million of real estate assets that we own, that need to be better managed and need to be dealt with – immediately,” Scarpa said.

• See Related: West Orange May Develop Part Of Rock Spring Golf Club, Officials Say

SEWER FEES

Residents also criticized a recent increase to the township’s sewer fees, which are related to this year’s budget struggles. Read More: Sewer Fees Increase In West Orange; Council Gives Green Light

In May, chief financial officer John Gross told the council that West Orange could collect an additional $2.4 million if it changes the way it calculates sewer payments for local properties, businesses and homes. Read More: 3 Ways To Reduce A Looming Tax Hike In West Orange

Gross said the projected amortized cost for the sewer system and treatment is close to $10 million annually. But sewer fee collections in 2023 were projected to only reach $7.3 million, he added.

Township sewer users pay a fee for the cost of maintaining the sewer system and for the cost of sewer treatment. Users are charged a fee based on the number of units in their home or building.

The West Orange Town Council approved a hike to local sewer rates in July. The previous sewer rate was $350 per unit annually. Each dwelling unit rate is now $550 per unit, with adjustments made based on the number of bedrooms in the home.

Councilman Bill Rutherford spoke about residents’ concerns during Tuesday’s meeting, saying he “shares their frustrations” and reiterating that it was a “difficult vote” to increase sewer fees.

“From the beginning, we wanted to move to a usage-based model,” Rutherford said.

However, the council was told that it couldn’t be done in time to impact this year’s budget, he said.

“So what we've all discussed in these meetings – all five of us – is moving to a usage-based model next year,” Rutherford said. “We did also inquire about using bathrooms instead of bedrooms to base this year's model [on], and because the data is less clear about the number of bathrooms and homes apparently than bedrooms, we weren't able to do that or use that with any reliability this year.”

Send local news tips and correction requests to eric.kiefer@patch.com. Learn more about advertising on Patch here. Find out how to post announcements or events to your local Patch site. Don’t forget to visit the Patch West Orange Facebook page.