Borough Council members in mid April voted to approve the 2015/2016 municipal budget which will result in a 4.6 percent increase in the municipal portion of the taxpayer’s property tax bill. The increase in the municipal budget exceeds the state-mandated two percent state mandated budget cap. The increase translates to the property owner paying $138 per year more in taxes for a home assessed at $150,000, for a total municipal tax bill of $2,990.50. However, this does not include the increase in school taxes.
Again, figuring on an assessed valuation of $150,000, the homeowner will be paying an additional $224.23 in school taxes with the school portion of the property tax bill being $6,635.73. Middlesex County taxes (the smallest portion of the property tax bill) has not finalized its budget. However, the school tax and municipal tax for a $150,000 assessed home will amount to $9,626.23 for the 2015/16 budget year.
Officials said that exceeding the municipal budget cap was driven by expenses that have risen outside the borough’s ability to control – and in areas permitted under the law. The total municipal expense budget is $14,954,590, according to figures provided by Councilman Philip George. Mayor Gayle Brill Mittler broke that number down further, saying that the total municipal tax levy for this year is about $11,279,000, while the borough projects it will receive about an additional $3,585,000 in revenue in fees and fines. “There’s a lot of development going on on Cleveland Avenue. And we’re looking at a lot of development elsewhere,” she said. “The revenue portion of this will be helped by those fees this year.”
Municipalities in New Jersey are required by a 2010 state law to limit their budget increases to two percent, with exceptions allowed only for debt service, unforeseeable emergencies, rising health insurance costs and employee pension payments. Municipal governments are required annually to pay into their workers’ pension funds, which are managed by the state. The amounts paid are set by law and are not negotiable. This year, Highland Park’s pension contributions rose $43,365, and employee health benefits increased $46,355, according to budget documents. “Some of our unions require that we pay for the same amount of health insurance that we have in the past,” the mayor explained. Lastly, the borough’s debt obligations rose $159,797 because of capital improvements such as roof repairs at the Highland Park Public Library and other municipal buildings.
Although municipal officials are allowed to exceed the cap to meet such obligations, the law has succeeded at keeping municipal budgets contained since it was passed in 2010, said Michael Cerra, director of government affairs for the New Jersey State League of Municipalities, which is membership association representing the interests of local governments and officials throughout New Jersey. In the previous 10 years, from 1999 to 2009, property taxes statewide had risen about 72 percent, according to the New Jersey Department of Community Affairs, a state agency. “A lot of hard decisions were made in the first couple years,” said Mr. Cerra. “I think every local government is challenged ever year to keep the levy at two percent, and that requires every year some very difficult choices that aren’t very popular.”