Town Topics — Princeton's Weekly Community Newspaper Since 1946.
Vol. LXII, No. 11
 
Wednesday, March 12, 2008
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Grim Report Challenges Borough Hall to Find Alternate Revenue Streams

Matthew Hersh

Borough Hall will have to exercise significant belt tightening in upcoming budget cycles if significant tax increases are to be avoided, according to a staff report delivered to Borough Council last Tuesday.

The report factors the state-mandated 4 percent cap on the municipal tax levy, as well as weighing the potential impact of a $300,000 decline in municipal construction fees in 2007. That decline, according to the report, could hit the Borough two-fold, canceling out the initial benefit of revenue, but the decline also precludes Borough Hall from anticipating, from a budget standpoint, any fee collections other than what the municipality collected the previous year. That spread amounts to roughly $600,000, said Borough administrator Robert Bruschi, during the report’s public presentation.

Coupled with approximately $100,000 in state aid, the decline presented “an obstacle to overcome,” Mr. Bruschi said, though quickly adding that the budget assembled for 2008, and likely for 2009, would meet all of the Borough’s budgetary requirements, including debt service, which allocates funding for capital improvement projects.

All municipal departments are “pretty much where they were at last year,” Mr. Bruschi said, pointing to something of an across-the-board departmental budgetary freeze, with the exception of some incremental increases outlined in the early draft of a $25 million operating budget, a 4.4 percent increase from 2007.

The state allows for add-ons to the municipal tax rate that would pemit a tax increase of nearly 6.5 percent, or an increase of roughly six-and-a-half cents for every $100 of assessed property value for the average Borough homeowner. Those add-ons account for increases in pensions, insurance, and the capital improvement fund, as well as in debt service, though Mr. Bruschi said the anticipated debt service load for 2008 would be down.

The state has eliminated about $70,000 in municipal funding for homeland security and the Borough is anticipating a possible $26,432 loss in state municipal property tax assistance.

The report did underline some bright spots, however. Last year, the Borough saw a $91,000 increase in funding from Princeton University and indicated that the Borough could see the same amount this year depending on construction levels. The Borough and University are in the final year of a three-year agreement where the University supplies an additional $1 million per year in financing, with commensurate increases reflecting hikes in the tax rate. That number also increases each time a new, tax-exempt building is constructed and occupied in the Borough.

Borough Mayor Mildred Trotman said that she had been in discussions with University administration about extending that agreement.

Mr. Bruschi presented Council with a “multi-year challenge,” aiming to seek out alternate sources of revenue in future years. Currently, the Borough’s finance committee, which includes the mayor, is examining increases in construction fees. The Borough has not levied an increase in that area in over a decade, Mr. Bruschi said, “but we can clearly justify that need.”

An expected sewer rate increase is currently being evaluated, Mr. Bruschi said. A third, “more significant” source of revenue could also be waiting in the wings, but Mr. Bruschi would not elaborate, pointing out that his office had been notified that the Borough could lose yet another $300,000 in state aid.

“That’s the kind of problem that we’ve been dealing with. Every time we get close to feeling good about where we are from an overall budget standpoint, we get these wrinkles,” he said. “It’s been a real challenge and it’s not really a good picture right now.”

Council members immediately began coming up with suggestions to soften the blow of an impending series of moderate to sizable tax increases in the Borough for years to come.

Councilman Roger Martindell continued his call for more joint budget meetings with Princeton Township on matters relating to jointly held agencies. However, the most fiscally significant agencies in both the Borough and Township — police, public works, and administration — are still included under each Princeton jurisdiction.

Councilwoman Wendy Benchley said the Regional Planning Board of Princeton’s Master Plan Subcommittee, on which she holds a seat, should consider a push for increased ratables in the Princetons, as well as the possibility of allowing greater height standards in town.

Councilman Andrew Koontz suggested an increase in purchasing materials, such as public works trucks and materials, with other municipalities. Mr. Bruschi responded that “we’re looking everywhere — we’re not going to pass anything up.”

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