|November 12, 2008
Levy Cap Waiver Request to be Considered
Earlier today, I formally presented our request for levy cap relief for the exorbitant increase in 2009 PFRS pension costs to the Local Finance Board.
The Board is empowered to grant a levy cap waiver pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46).
As previously reported, the Division of Pensions, based upon the actuarial analysis and approval by the various Boards of Trustees, has posted on their web site the pension billing for 2009. Payments will be due April 1, 2009.
The Police and Fire Retirement System (PFRS) will see a total increase of $56,734,552 for property tax payers. The total 2009 contribution required from Local Governments is $696,476,702 compared to the 2008 levy of $639,742,150. This represents an 8.87% increase which will be subject to the Property Tax Levy Cap and the Expenditure Cap. The legislation which exempted pension increases from levy cap was only helpful during the phase in period. Because in 2008 the PFRS went to 100%, the increase for 2009 must be absorbed as part of the levy increase.
While no decision on our request was made, the Local Finance Board assured us that they are aware of the serious cap problems faced by municipalities in the upcoming year. They, further, indicated a willingness to decide on our request within the next month, so as to give local budget makers some time to plan for the treatment of PFRS costs ion their 2009 budgets.
We will keep you posted of the ultimate decision.
Very truly yours,
William G. Dressel, Jr.