RAHWAY — This year the average taxpayer with a home assessed at $133,000 will see a $116 increase in municipal taxes, but that does not include school or county taxes.
Although county taxes are tentatively expected to rise 4.2 percent according to County Manager Al Faella, the school tax has yet to be determined.
The municipal portion of taxpayers’ three-part tax bill is a reflection of the $34.4 million needed to be raised by taxes, an increase of 3.1 percent over last year, according to city Finance Director Frank Ruggiero. The overall budget, which is offset by revenue and state aid, came to $50.7 million.
However, since the city council just received the annual budget for review last week, there still could be last minute tweaks before the public hearing and final adoption on April 8.
Monday, Ruggiero went over the details of the 2013 spending plan with LocalSource, pointing out that many factors played into the $50.7 million spending plan.
“The city lost approximately $11.2 million in tax ratables last year, which represented $25 of the average tax increase,” he said, explaining there were 560 tax appeals in 2012. That resulted in more than $500,000 in tax refunds, Ruggiero said.
Another factor that weighed down this year’s budget was employee health benefits, which increased 8 percent over last year, or $55 of the average tax increase.
“Only $36 of the proposed average tax increase went for the support of actual municipal operations,” the finance director said.
Of that $36, a Passaic Valley contamination lawsuit that most municipalities were a part of the last several years finally settled, requiring the towns involved to pay $95,000 each. That settlement was $9 of the increase, with Hurricane Sandy damages taking up $16. The remaining $11, Ruggiero said, went towards a general municipal increase.
“When the $36 is broken down you can see that a good chunk of that increase was for things out of our hands,” the finance director said.
The 2013 budget does reflect the cost the city had to bear from damage related to Superstorm Sandy, which came to $850,000, along with $1.1 million that was bonded for municipal building repair.
Although 2013 was a difficult year for Rahway because of Sandy, Ruggiero said the city was able to stay under the state imposed cap.
“It was not too bad this year,” the finance director said, but he predicted that next year could be a more difficult budget year because of contractual issues.
The council did tackle one problem that was a drain on city coffers.
In February in his annual State of the City address, Mayor Rick Proctor mentioned that in 2012, a shortfall required the city to supplement the utility with close to $700,000 from the current fund. He asked council to address the issue by raising water rates.
“While this is an unpleasant prospect it is necessary to make the utility self-liquidating and help restore the city’s financial health,” the mayor said in his address.
Council introduced an ordinance in February that will raise water rates by 15 percent, effective April 1. The ordinance, approved at a public hearing and final reading March 11, increases the minimum monthly water charge from $11.41 to $13.12, or 15 percent. Residents can also expect increases of 2 percent through 2016.
The increases, according to Ruggiero, would allow the utility to become self-liquidating.
The city council also introduced the 2013 Special Improvement District budget. The SID levies a special additional tax of close to 7 percent on 137 business and commercial owners. This separate tax is in addition to the regular municipal, school and county tax.