The following article appeared in todays Asbury Park Press: Township residents face a more than 10 percent property tax increase in the proposed 2007 municipal budget, a hike that officials blame on the aftermath of the property revaluation coupled with a stagnant economy. If adopted, the $62.9 million budget will increase the tax rate from 41.1 cents to 45.5 cents per $100 of assessed property value.
To resident Dan Chaskin, 60, that 10.7 percent jump “seems excessive,” especially when compared to the school budget, which despite being much larger is only seeing a 3.8 percent tax rate increase.
Township officials point to two factors accounting for about half the increase that the Board of Education doesn’t have to deal with.
One stems from the wave of appeals filed by residents after the property revaluation in 2005. The revaluation dropped the total tax rate from $3.549 per $100 of assessed property value to $1.559. Committeeman Charles Cunliffe said the town received 1,800 appeals last year and 1,000 more this year, forcing it to pad the budget with another million dollars to cover costs of appeals that might succeed.
It remains unclear how many, if any, appeals have succeeded. The filing date this year was in April, so all appeals have likely not been resolved yet, according to Cunliffe.
“If we lose any of them we have to have the money to back it,” he said.
The second culprit in the tax hike is a downturn in the economy, which officials say has caused a 1.56 percent drop from last year in number of people who paid their taxes. This then has driven the reserve for uncollected taxes up from $4.35 million in 2006 to $5.47 million in the proposed budget.
As Cunliffe again explained: “The township can never take the chance to be underfunded.”
The other half of the 10 percent tax hike can be attributed to higher insurance, utility, fuel and landfill disposal costs, which have added a couple hundred thousand dollars to expenses, said Frank Edwards, the township manager.
A final blow comes from the additional $688,000 the town has to pay this year as the state shifts another 20 percent of pension costs to municipalities, Edwards said.
Lakewood is now footing 80 percent of that bill when five years ago the township paid nothing.
The added expenses are compounded by a drastic hit the township’s surplus has taken due to the struggling economy and real estate market, Cunliffe said.
Yet the money in these coffers is exactly what resident Al Fisher thinks should be utilized more in lieu of raising taxes.
“They have $18 million in there. The fact that they don’t use that just because it’sbackup, that’s not right,” 73-year-old Fisher said, calling himself an outspoken critic of the municipality.
Edwards said the number was actually about $9.9 million as of the end of 2006, $7.5 million of which is being appropriated in the proposed 2007 budget. There is no “rule of thumb” for deciding how much to keep in surplus, just “whatever the township and auditor feel comfortable with” in terms of emergency spending, Edwards said.
Cunliffe predicted it could take another two to three years before residents start to see a decrease, or at least a leveling off, of the tax rate.
“I don’t think next year the increase will be as dramatic as the appeals begin to tail off,” he said.
Still, the committeeman stressed the need to re-examine employee benefits costs and labor union contracts, especially given the state’s new budget law July 1 that puts a much firmer cap on property tax increases.
As of now, the 4 percent cap is flexible enough to allow municipalities such as Lakewood to get away with higher tax rates.
The township’s handful of unions currently require in their contracts about a 3.6 percent annual rate increase.
“We don’t want to lay people off so we have to do something about these contracts,” Cunliffe said. “It’s going to get to the point where we reach an impasse with the unions.”