West Orange Mayor Says ‘Perfect Storm’ Swirls This Budget Season

WEST ORANGE, NJ — A loss of COVID aid. A rise in expenses. Dwindling reserve funds. It’s all leading to a “perfect storm” for the municipal budget, according to the mayor of West Orange.

On Monday, Susan McCartney released a statement about the 2023 town budget, which is still under development (read the full statement below). The mayor didn’t sugarcoat the news.

“This budget promises to be the test of a lifetime,” McCartney said.

Earlier this month, it was revealed that homeowners face a possible hike of 16 percent to the municipal portion of their taxes. It's a figure that has been seeing harsh criticism from many local property owners, some of whom have blamed the town's real estate and development decisions for pouring gasoline on the fire. Read More: Some West Orange Residents Are Fuming Over 16% Proposed Tax Hike

“A 16 percent property tax increase at this time would be devastating to just about everyone who lives in this town,” a resident said at the council meeting on May 2.

Budget workshops are scheduled for 6 p.m. on May 18 and May 24 in the council chambers at Town Hall, 66 Main Street.

Meanwhile, West Orange Board of Education narrowly approved the district’s school budget last week, clearing the way for a 2.66 percent hike to the school portion of local homeowners’ property taxes. It will mean a $309 tax increase for a West Orange home assessed at $336,591.

“If you look over the last 10 years, the tax levy in this district has grown less than inflation,” board president Brian Rock said during their May 8 meeting. “In real dollars, we are collecting less money today than we were 10 years ago.”

“The only reason we are continuing to serve our students is because state aid has increased,” Rock said. “Without that, we would be cutting to the bone.” Read More: Tax Hike Imminent As West Orange School Budget Hits Finish Line

Property taxes in New Jersey 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

Here’s how that played out in West Orange last year (numbers rounded up):

• School – 61.7%
• Municipal – 26%
• County – 12.4%

MAYOR: ‘EVERYTHING HAS PROS AND CONS’

According to McCartney, the town council is considering adopting ordinances for “recurring fees” to offset township expenses. She referenced the budget workshops planned for May 18 and May 24, and said that concerned residents can email feedback and suggestions about possible budget cuts to WO2023Budget@westorange.org.

The mayor put out the following statement on Monday:

“One of the most serious issues that greets every mayor in any community is the municipal budget. West Orange municipal tax history over the last two decades has been guided by a single mantra: Dollars are best left in the pockets of its taxpayers rather than in the township’s savings, known as reserves. So, over those years, when costs rose faster than taxes and other revenues, the difference was covered by using the reserve funds.

“Everything has pros and cons. Leaving dollars in taxpayers’ pockets benefits by helping them meet day-to-day challenges and improving quality of life. Nothing exemplifies this more by the township’s decision to forego a ‘normal’ tax increase during COVID. Grant funds were used to pay for day-to-day township expenses, leaving taxpayers with more dollars at their disposal to meet their personal needs during the crisis. The downside to accepting this relief is that the grants have now gone away, but the township’s expenses have not.

“Over the last 14 years, the township’s municipal taxes have risen 30%, its expenses have risen 45%. The difference was covered mostly by applying reserves (township’s savings) to keep taxes from going up. However, eventually these funds diminish to the point where expenses can no longer be covered by these savings.

“Many expenses a municipality has are predictable and/or absorbable. Unfortunately, the harsh reality is that from time to time there are dramatic and unforeseen circumstances that cannot be planned for. These situations are normally covered by our available reserves without any impact to the taxpayer.

“I was greeted by the perfect storm when I took office this past January. All these factors came into place with a loss of $5 million in COVID aid and an increase of $5+ million in expenses. The situation was compounded by the lack of the appreciable ability to apply reserves to offset a municipal tax increase. Budget workshops with the town council will seek, evaluate, and hopefully offer solutions to be agreed upon.

“Over my career in public service, as many of you know, my management style is that of a collaborator. Bringing people together to create the best outcomes has always been my priority. This budget promises to be the test of a lifetime, I am up for the challenge as we maneuver through this budget process, difficult decisions about our levels of service, taxation and fees for services will have to be made.

“The administration has submitted and council has been reviewing and adopting ordinances on recurring fees meant to offset township expenses. Please send us your ideas on what township services that are provided are important to you. Please let us know what services you feel must be maintained and what services you feel can be eliminated under the circumstances. To ensure that your voice will be heard, I have set up the following email address for you to send your ideas for all of us to work together: WO2023Budget@westorange.org.”

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