New Hersey State of Muncicipalities Facebook Twitter  Linkedin with NJSLOM NJSLOM YouTube Channel NJLM Blog       

(The article below appeared on on Sunday, January 8, 2010)

Local Issue: How North Jersey mayors are making ends meet

Sunday January 8, 2012, 10:46 AM
The Record

Mayors from across the state have divulged how they coped with the 2 percent cap on municipal budget increases, their struggles with mounting tax appeals and other issues in a survey conducted by the New Jersey League of Municipalities.

How they're doing it

Below is what a survey by the New Jersey League of Municipalities completed by 114 mayors or their representatives found:

2 percent budget increase cap

29 percent said their total levy increased 2 percent exclusing debt services, capital expenditures, declared emergencies and pension and health-benefit costs.

Top actions to control costs

  1. Shared services
  2. Used a higher percentage of surplus than in previous years
  3. Increased health-care contribution from employees
  4. Deferred capital improvements

Tax appeals

66 percent saw an increase in residential tax appeals in 2011.

Affordable housing

Nearly half said that when their housing obligations are set, the town will implement 100 percent municipal-sponsored partnerships with non-profits to address part of the obligations.

Fuel tax

59 percent support an increase in state motor fuel taxes if the proceeds finance the repair and renovation of municipal and county transportation infrastructure.

The survey was administered for the 13th consecutive year by the NJLM, an association that caters to the state's 566 mayors and 13,000 elected and appointed municipal officials.

"I can use the results to help me understand what local officials need," said William G. Dressel Jr., executive director of the NJLM. "If they need more education on sharing services, more information on privatization - alternate ways of trying to provide municipal services other than using the property taxes."

The survey was mailed on Nov. 10 to all the state's mayors and could be filled out by hand or online until Dec. 9. The results were unveiled last week. About 114 officials participated.

Although each town is unique, hearing how other governments operate is useful.

"We might see something we haven't thought of," said Borough Administrator Michael Kronyak, who completed the survey for Hasbrouck Heights. "Or maybe just in doing the survey, something might click."

That borough is among many that have seen a growing number of tax appeals. In 2011, Hasbrouck Heights had 125; River Edge, 130; and Rutherford, more than 300, according to survey data.

"I think the tax appeals were really driven by the economy," Kronyak said, "The economy drove property values down as sale prices on properties went down, the new sale price became the basis for people to file their appeals."

Despite the appeals, the municipality still needs a certain amount of money to function. "The tax rate gets driven up when we're having to make refunds on taxes that were already paid or we have to give a credit," he said. "That all has an impact on the amount to be raised through taxation."

"It's a bigger problem than most people realize," Kronyak added.

The constraints of the 2 percent cap on budget increases - excluding debt services, capital expenditures, pension and health-benefit costs and declared emergencies - is forcing towns to become creative.

In Alpine, officials increased fees in their building and health departments to generate more revenue. The town was also helped by a new police contract that calls for a 2 percent pay increase, down from 4 percent in the previous contract.

"It's a big step in the right direction because the police budget is usually a large part of the overall municipal budget," Alpine Mayor Paul Tomasko said.

Several mayors indicated that they're using more of their surplus than they have in the past to stay within the 2 percent, including in Hasbrouck Heights and River Edge, survey data showed.

That concerns Dressel, of the NJLM, as does municipalities' selling off land and deferring capital improvements.

"They can only do that so often," he said. "That's not a reoccurring revenue that you can depend on, particularly with an ever-demanding public. In down economic times, government has to provide more services, not less."

The number of towns using furloughs and layoffs, particularly in their police and fire departments, also caught Dressel's eye.

"That tells me I've got to continue to push for civil service reform," he said. "That's an impediment on how you are able to manage your personnel. Hiring, firing and promotions are all regulated by a state agency in Trenton."

One move towns are taking to curb spending is getting their employees to contribute to health-care costs.

In Hasbrouck Heights, 50 employees paid toward their benefits in 2011. As of this month, all 85 full-time employees will pay at least 1.5 percent of their costs, adding $25,000 to $30,000 to the budget, Kronyak said.

Changing union contracts, which often regulate those contributions, has far-reaching implications because the contracts set expectations for non-union personnel, as well. "Employees are contributing more now than they have in the past," Alpine's Tomasko said. "Every bit helps." Every kind of relief we can give taxpayers is important."





Privacy Statement | NJLM FAQ
New Jersey State League of Municipalities • 222 West State Street • Trenton, NJ 08608 • (609) 695-3481
  FAX: (609) 695-0151