Spring Lake Heights Faces $68 Tax Hike Under Proposed Budget

Local property taxes in Spring Lake Heights could increase by an average of $68 this year if the Borough Council adopts the $5 million 2011 municipal budget introduced at its March 14 meeting.

The total proposed budget of $5,028,388.83 is actually 2.10 percent or $107,738.01 less than the calendar year 2010 approved municipal budget of $5,136,126.83.

However, property owners will take on a 1.5-cent municipal tax rate hike to make up for the loss of more than $6,600 in public and private grants to the town and an $8,500 drop in local revenues, according to figures presented by Chief Financial Officer Colleen Lapp.

Patty Cindea, who chairs the council’s finance committee, pointed out that the weak economy and slow real estate market has resulted in the total net assessed valuation of properties in town plummeting by more than $5.5 million. Consequently, there are fewer properties on the borough’s tax rolls this year.

As is the case throughout many New Jersey towns, state aid to the borough remains flat at last year’s allotment of $399,325.00. Without an increase in state aid, more of the increased cost of running the town is placed upon its taxpayers.

 The total amount to be raised by taxation this calendar year is $3,734,718.60, which reflects an increase of $155,115.32 or 4.33 percent more than last year’s taxation amount of $3,579,603.28, according to borough documents.

While acknowledging the proposed tax hike and the additional burden placed on property owners, Cindea stressed that the introduced budget remains “a work in progress” that could be further tweaked by the governing body.

“The goal is a zero tax increase,” Cindea said.

Under the introduced budget, the owner of a home in the borough assessed at the average of $457,158.73 would pay $1,476.62 in municipal taxes during calendar year 2011. That amount is $68.57 or about 4.64 percent more than last year’s yearly tax bill of $1,408.05.

The figure breaks down to 32.5 cents per $100 of assessed valuation or 1.5 cents more than last year’s figure of 31 cents per $100 of assessed valuation, borough documents show.

Funding Increases, Decreases

Three separate line item appropriations in the introduced budget show the greatest increase over last year’s appropriations. Public safety has been allotted $201,293.00 this year, which is $35,155.00 or more than 21 percent over the 2010 allotment of $166,138.00.

The reserve for uncollected taxes, a fund put aside when property owners are late paying taxes, has been increased to $262,150.00, which is $32,150.00 or nearly 14 percent over last year’s allotment of $230,000.00.

Lastly, a line item for health and human services has been increased to $11,300, which is $1,100 over or nearly 11 percent more than last year’s appropriation of $10,200.00. The appropriation for health and human services covers the borough board of health, environmental commission, animal control and public assistance, Lapp explained.

However, proposed appropriations in four separate areas have decreased as well. A line item for grants to be distributed locally has been cut by $11,634.33 or nearly 70 percent. The amount of $2,850 to be placed in the contingency fund equals $2,500 or nearly 47 percent less than last year’s allotment of $5,350.

Also, the proposed amount to be paid for debt service is $81,320.50 or $46,025.00 less than last year’s allotment of $127,345.50. That reduction represents a more than 36 percent decrease between 2010 and 2011. Funding for interlocal agreements has been sliced by $116,445.03 representing a nearly 25 percent cut since last year.

For the coming year, the budget calls for only $300,000 to be taken out of its anticipated surplus, which is half of the $600,000 surplus that was set aside to balance last year’s municipal budget.

Budget Criticized, Clerk Hired

Democratic Councilmen John P. Brennan, Jr.  and Thomas Vorbach accused the council’s Republican majority of crafting a minimal tax hike merely to curry taxpayer favor. Instead, the council should prioritize paying off approximately $1.5 million in debts rather than focus on minimizing the tax hike, Brennan and Vorbach said.

 “By reducing the amount of money that you are allocating towards the debt service, you’re putting off repayment of debt to look good for the papers and the people,” Brennan said, who also described the introduced budget as “fraudulent.”

If the borough only pays back interest on its debts and puts off repaying the principal, the long-term financial impact could be “worse than a tax increase,” Vorbach added.

“It’s about planning ahead and not going into a problem in the future,” he said.

Brennan and Vorbach also protested against a $50,000 line item designated for the salary of a  permanent full-time municipal clerk, as supported by their GOP colleagues.

Spring Lake Heights has been without a full-time borough clerk since the end of last year, when the previous clerk was not re-appointed for financial reasons. Acting Municipal Clerk Janine Gillis, whose permanent job is that of deputy clerk, has been performing the duties of both jobs pending the hiring of a full-time clerk.

 Brennan and Vorbach pressed for the $50,000 set aside for the borough clerk’s salary to be applied to capital improvements instead. The line item proposed for capital improvements in 2011 remains at $10,000, the same as in last year’s budget. A permanent borough clerk could be appointed at a later date, Brennan said.

However, Councilwoman Sara King, who co-chairs the governing body’s personnel committee, shot down Brennan’s suggestion as impractical.

“You have to have a borough clerk,” King said. “You cannot run a town without a borough clerk. (Brennan is) talking about a $50,000 item."

The workload in the borough offices has been overwhelming with other employees pitching in to assist Gillis in performing both of her jobs, King added.

With Brennan and Vorbach dissenting, the council voted 4-2 to hire a full-time borough clerk later that evening. The new clerk will begin work on April 4. 

A public hearing and a final vote on adopting the budget will be held on at the council’s April 11 meeting.