UNION, NJ – The township introduced its 2015 municipal budget last week and it appears the average homeowner with a house assessed at $46,500 will see a hike this year of $99 in the municipal portion of their tax bill. This is up considerably over last year when the average homeowner increase was $56.
The annual overall spending plan came to $91,498,557, an increase of $1,045,000 over last year when the spending plan was $89.9 million, or a 1.1 percent increase. However, the amount to be raised by taxes for 2015 is $67.6 million compared to last year when that number was $64.8 million.
Despite the increase, Township Administrator Ron Manzella said this was the fifth year Union successfully met the 2 percent tax levy cap mandated by the state.
“It becomes more challenging every year, though, with declining revenues and no increase in state aid,” he said.
Mayor Manuel Figueiredo felt this year’s budget was constructed well, considering state mandates and reduced state aid.
“The 2015 budget maintains the current staffing levels of our police and fire departments, demonstrating our commitment to public safety and the promise to our residents of no reduction in the valuable services that they receive and have come to expect,” the mayor said Tuesday.
The municipal portion of a homeowner’s tax bill is just one part of the three-part tax bill that also includes school and county tax portions.
Since 2009 when the average homeowner saw an increase that climbed to $168, the annual tax increase had been declining, until last year. However, this year, several factors contributed to this number increasing, according to Assistant Township Business Administrator Tammie Kopin.
“I think the fact that the red light cameras were turned off hurt us because now we no longer can anticipate $800,000 in revenue from that source,” she said, adding that another hit came from the construction department where revenue from permitting was down.
“Part of the problem with the permits is that when you put together a budget you can’t expect, you can only anticipate based on what the prior year revenue was and in this particular area it was down,” said Kopin, noting that the township expected this area to increase this year, which would help the 2016 proposed budget.
The township, Kopin said, used $4.5 million from surplus to offset the 2015 budget, which is less than in 2014 when they used $5 million. Like last year, this left approximately $3 million in reserve.
Kopin explained that while last year all department heads were asked to cut 10 percent off the top of the prior year’s spending plan, this year they were looked at more individually.
“Many of our departments were down to bare bones so we looked more at the departments who actually could cut from their budgets,” she explained.
Kopin explained that while health benefits continue to have an impact on the annual budget, the township is in the third year of a four-year state mandated plan whereby employees contribute a percentage of their salary toward health benefits. This four-tiered approach has helped lessen the impact of health benefit costs, the assistant administrator said, but premiums still went up 8 percent.
Last year Manzella said by 2016 all township employees will be at their maximum contribution, which will help considerably with the overall cost of health benefits.
Kopin agreed. “Department heads are all now at the maximum contribution towards their health benefits,” Kopin said, adding that even though employees are contributing more towards their health benefits, the township still bears a heavy financial burden in this area.
For example, she said if an employee is on the family health plan, the cost to the township runs around $25,000, depending on the plan selected. Of this amount an employee contributes around $8,000, while the township has to kick in the remainder.
If an employee does not need health insurance because their spouse has it, then an employee is given a $3,000 incentive stipend.
“This saves the township money in the long run,” Kopin said.
Still hurting the township financially is the fact Merck appealed their taxes last year and now pays only $3 million compared to the $12 million they previously paid.
Kopin noted that when ratables go down taxes go up, but this year this number actually increased by $470,000.
The township will also be negotiating all five union contracts, which includes police, fire and clerical employees.
“All of our contracts are up Dec. 31, so we will be negotiating contracts,” she said, but was unwilling to speculate if this negotiation would result in any savings.
The township expects to adopt the municipal spending plan later in April.