Council Divided on Percentage to Raise Taxes

The council voted 3-2 against a motion in a special meeting Wednesday to only increase taxes by 2.5 percent as opposed to the 6.5 percent originally proposed by the administration for the 2012 municipal budget.

The includes a 6.5 percent, or $65, increase over the 2011 municipal taxes—and council members have said it's not acceptable.

"In my review of the budget, the current proposal has a 6.5 percent tax increase, and the budget is up by 4.5 percent," said councilman Matthew Moench. "My opinion is that those two numbers are simply not sustainable in today's economic environment."

"It is incumbent on us to find cuts to make the tax increase more sustainable," he added.

The budget is set at $38,451,229.13, a 4.5 percent increase over the 2011 budget set at about $36.8 million.

The municipal tax for a Bridgewater resident is set at $1,053 for a home assessed at the township average of $411,662.

In terms of tax levy calculations, without certain state-allowed exceptions, the tax levy rises less than the state-mandated 2 percent cap. But there are exceptions in the budget, totaling almost $1 million, which are allowed to increase the tax levy higher than 2 percent.

Those exceptions are for capital improvements, debt service and emergencies in 2011 that include payments concerning Hurricane Irene and the October snowstorm.

Moench said he would advocate for about a 2 percent tax increase.

"I think 2 percent is a number residents understand," he said. "It is in line with changes in the economy with salaries, and I think we can meet that without any significant decreases in service."

The purpose of Wednesday's special meeting was supposed to be for the council to vote on a different percentage of tax increase, therefore allowing the administration to begin looking at cuts to be made before a 2012 budget can be approved.

But council members were divided on the number to settle on.

Councilman Howard Norgalis agreed with Moench about sticking with a 2 percent increase, or lower if possible.

"I have received numerous comments from the public, who are aghast at a 6.5 percent increase," he said. "I will support a 2 percent increase because I think that's what the residents want."

Council members Christine Henderson Rose and Allen Kurdyla were in favor of sticking with a 4 or 5 percent increase, to avoid too much of a decrease in services.

"I think 2 percent is too low, and I think it cuts into the heart of the budget and cuts too many services," Rose said.

For Kurdyla, he said he is not happy with the $65 increase, but understands it might be necessary, particularly with the addition of emergency and litigation expenses from 2011, namely the concerning the mosque on Mountain Top Road..

"I also realize that I would like to see the budget decrease," he said. "I don't want to penalize our township for the expenses we couldn't control."

"I don't feel that getting to 2 percent would allow us to continue and provide services," he added. "And 0 percent will absolutely affect services and hurt us for a long time."

Councilman Filipe Pedroso said he would prefer to see a 0 percent increase, but was also unsure that voting on a change was appropriate in a special meeting. He said he would vote against any decision Wednesday, and would prefer to see the vote taken at Thursday's regular council meeting.

"I haven't seen what a 0 percent increase in the budget would look like, and I would like to have department heads be challenged and get the task of coming before us and talking on a budget that doesn't have a tax increase," he said.

Kurdyla said that part of his concern with the budget is the litigation process with the concerning the mosque on Mountaintop Road.

"These are all items we agreed to do to protect the zoning in Bridgewater," he said, "to work on behalf of the residents to help maintain the character of Bridgewater."

The other issue, according to finance director Natasha Turchan, are give-backs for union contracts that are included in the 2012 budget, but were not in the 2011 budget. Many costs, she said, were negotiated out of the 2011 budget, but were promised to be included in 2012 as part of the contracts.

"Police gave up $400,000 in salaries in 2011, and it was promised to come back in the 2012 budget," she said. "While 6.5 percent sounds large, it includes everything we had to bring back, including litigation and two storms."

"Those amounts will still have to stay, [so a lower tax increase] will be a direct impact to services," she added.

Still, Norgalis said he believes it is important for the council to decide on an acceptable budget for 2012, and then ask for assistance from the administration.

"We don't want to cut services, but we have to be realistic, and there are times we have to reflect and see what services can be pared down," he said. "The budget reality is that we, like thousands of towns, are faced with a budget crisis."

The council also discussed the possibility of removing ordinance-required positions from the police department. Currently there are three positions, at $54,000, with funding allowed in the budget in case the department wanted to add more—this is allowed by ordinance, and the funding can only be removed if the ordinance is changed.

"One suggestion I had was we had three vacant positions that had been vacant for over a year, but we also have a lot of overtime costs," Moench said. "I'd rather fill those positions and decrease the overtime, than always relying on overtime."

The council members agreed that it is not possible to have a 0 percent increase in the budget, but they were split between 2 and 4 percentages.

"I don't think 2 percent will be devastating to the budget," Moench said. "By properly managing overtime, we can shave costs where we can. I think a lot of these cuts can be made without impacting services."

But Rose said she is concerned about having money to account for a "rainy day." She said the council cannot know when there might be another tropical storm or other such emergency that requires additional funding, and it would make sense to not have to push those costs off again, like they did with the 2011 emergency funds after Irene and the October snowstorm.

"I know we have a responsibility to the public, but I also think we are here to plan appropriately so we have a budget everyone can work with going forward and not just look at one year," she said. "We need to have space in the budget so that when we come to next year, if we have extraordinary expenses, it is just a question of what the damage will be."

"We need to leave some room for planning for future costs," she added. "We cannot regenerate surplus like we used to, and we are not getting money from the state."

For Kurdyla, he believes they are just debating a difference of about $200,000, which is equal to 1 percent. The 6.5 percent tax increase, he said, is worth a total of $900,000, so every percentage point is worth $200,000.

"My logic is, for the amount of money we're sitting here talking about, I think in the general scope of things, with a tax increase of 6.5 percent, it's roughly $65 per household," he said. "We are dropping that into the $40 range if 4 percent and $30 if 3 percent."

"Maybe the logic is what dollar increase is acceptable," he added.

But with the council voting against the motion for a 2.5 percent increase, the discussion was continued until Thursday's 7:30 p.m. regular session meeing.