Mayor, Council Say Christie’s Letter to Residents Contains Inaccurate Statements About Tax Savings
To the Editor:
Last week, Governor Christie sent a letter to some residents of Princeton congratulating us on consolidation. We want to thank the governor for his praise and thank him for reiterating the promise he made in September 2011 to reimburse the taxpayers of Princeton for 20 percent of the transition costs incurred through consolidation. We have requested $471,119.60 from the State and look forward to receiving these funds in time to incorporate them into our budget for this year.
The governor’s letter also contained some inaccurate statements concerning the tax savings that we would like to correct. We estimate that Princeton will save approximately $2.5 – $2.9 million from consolidation in year one. This is greater than the initial estimate from the Consolidation and Shared Services Study Commission. These savings are in comparison to what we would have spent on existing municipal services and operations had the municipalities remained separate. However, these savings are not a net reduction to the total municipal budget, as they are offset and adjusted by several budget and tax impacts. These include one-time transition expenses that must be incorporated into the municipal budget, the cost of expanding residential garbage pickup to the area of the former Township, moving to a single equalization ratio for all of Princeton, and the effects of inflation year over year. The first three impacts were addressed in the tax impact analyses done by the Consolidation Commission and updated by the Transition Task Force, both of which are available at www.cgr.org/princeton. The impact of inflation is to make it more difficult to avoid tax increases without significant cuts to services.
Of the total property tax bill, approximately half goes directly to the schools, and about 30 percent goes to the County. A reduction of the property tax by 10 percent, as mentioned by the governor, would require a 65 percent reduction in the municipal budget this year. A reduction of this magnitude was never expected; elimination of the police, public works, heath, recreation, sewer and planning departments would not be enough to reach this benchmark. We want to make clear that a 10 percent property tax reduction is simply not achievable; the municipal portion of our property taxes is too small for any reduction from consolidation to have that great of an impact on our overall property tax bill. We have been in communication with the governor’s office regarding the consolidated budget, and we are confident that they now understand these constraints.
Princeton is proud to be leading the way in providing high quality services as efficiently as possible. We have demonstrated budget savings with consolidation and we believe that this will continue to full implementation. We will continue to manage our costs and accurately communicate the fiscal impacts and benefits to our residents.