Town Topics — Princeton's Weekly Community Newspaper Since 1946.
Vol. LXV, No. 17
Wednesday, April 27, 2011
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Township Passes $36.6 Million Operating Budget

Ellen Gilbert

A $36.6 million operating budget with a flat tax rate was unanimously approved by Township Committee at its Monday evening meeting.

Citizens’ Finance Advisor Committee (CFAC) Chair Scott Sillars noted that 2011 marks the third consecutive year of a flat tax rate, which he described as “good and bad” news. The good news, he said, is the Township’s apparent ability to manage costs; the bad news is the evidence of a soft property market that needs to be watched.

The importance of maintaining a stable “current fund balance” was cited several times during the evening. This accumulation of past budget surpluses is the Township’s financial “cushion,” explained Mr. Sillars. Its availability is critical to offset either temporary, anticipated — “or more importantly, unanticipated” — events. The fund balance, which is currently approximately $7 million, “enhances taxing and budgeting flexibility,” and, since “negative trends can be hard to reverse,” it must be managed with the long-term in mind.

An earlier report from Standard & Poor’s suggesting that the Township’s fund balance was significantly lower than that of other triple-A rated communities was, Mr. Sillars reported, erroneous. Currently at 20 percent, it is “slightly below” the 32 percent average of comparable towns, but not nearly as dire as the earlier report claimed.

Maintaining the current fund balance will be accomplished by employee wage freezes and furloughs, and “reductions in head count.” Two nonrecurring revenue items, Princeton University’s “fair share” contribution of $500,000 along with $350,000 from a bond issue, will also offset expenditures this year. Mr. Sillars noted that conversations with the University should continue to ensure regular “fair share” payments in the future. He described the 2011 flat fund balance as “eminently doable and probably moderately conservative.”

Looking at how well budget predictions did in 2010, Mr. Sillars reported that there was a two-percent ($427,000) reduction in the collection of property taxes. He attributed this to declining property values, delinquency due to the economy, and the difficulty lower- and middle-income residents had in paying the higher tax rates that resulted from the 2010 revaluation. “At this point there is no indication of any turnaround in property values, which means continued pressure on the ratable base,” noted Mr. Sillars. Approximately 60 percent of anticipated budget revenue comes from property taxes.

Mr. Sillars also reported that “several expense categories,” including pensions and debt service, “are likely to grow, creating a predictable budget challenge” in the years ahead. CFAC Vice Chair Zvi Eiref reiterated this concern, noting that “2012 is shaping up to be quite a difficult year.”

This year’s budget reflects a zeroing-out in funding for first aid organizations, which were lauded for their success in collecting revenues from other sources.

In addition to Mr. Sillars and Mr. Eiref, members of the CFAC, which was created in 2008 “to offer advice to Township Committee,” include Anne Burns, John Wynne, Jr., and Brian McDonald. Township Committee members Sue Nemeth and Liz Lempert also attend the monthly meetings. Mr. Sillars made a point of saying that the committee is not involved with the Consolidation Commission.

Copies of the 2011 budget are already available online at the Township’s website; it was reported that Mr. Sillars’s presentation would be added there as well. Print copies of the budget may be obtained at the Clerk’s Office in Township Hall and at the Princeton Public Library.

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