$46 Million Budget Introduced; Average Homeowner to See $122 Municipal Tax Increase
The budget includes a proposed tax increase of $121.75 on the average assessed home.
Council introduced a $46.2 million municipal budget Tuesday that would increase taxes 4.5 percent, or $121.75, on the average assessed home.
The budget, whose introduction passed in a 3-2 party-line vote, maintains borough services and avoids furloughs and layoffs for borough employees.
The Republican council members who supported the budget lamented the tax increase, but said it was necessary to rebuild the surplus that was depleted last year when council drew from reserves to hold taxes flat – a move they called an “election year gimmick.”
“We have to make up the differential for the fact that we used a substantial amount of surplus last year so that a zero tax increase was delivered to the taxpayers,” Deputy Mayor Ed Trawinski said. “Fortunately this year because of the hard work of the manager and the department heads, taxes have increased, but they haven’t shot up to the point where they did in the prior times when we had zero increases.”
Council offset last year’s budget with nearly $5 million of surplus and capital surplus funds, close to $2 million more than has been proposed in this year’s budget.
Manager Tom Metzler said that total reserves would be down to just over $2 million at the close of this fiscal year, but that the generation of new revenues should replenish the declining surplus, or at least stabilize it going forward.
Councilwoman Lisa Swain voted to oppose introducing this year’s budget because of the extent that it would increase taxes.
“It wasn’t too long ago that I was out campaigning and the number one concern that I heard from all the residents in Fair Lawn was their taxes,” she said. “I’m not about to turn my back at them…the residents are not ready for this."
Councilman Kurt Peluso echoed Swain’s sentiment about the tax increase, saying he would only support a budget that met the state’s 2 percent tax cap.
“If you’ve been reading the Record lately, in all the editorial pages everyone is saying, ‘We need to maintain this 2 percent cap,’ and I agree,” he said, bemoaning the loss of residents whom he said move out of town solely because they cannot afford the borough’s taxes. “I would support any budget that maintains that 2 percent cap but once you exceed that 2 percent cap, I do not support it.”
Fair Lawn was able to increase taxes above 2 percent this year because, under the law, a municipality that raises taxes less than 2 percent in one year can bank the difference and use it to exceed the cap in subsequent years.
In late April, Peluso proposed making a number of cuts in an attempt to reduce the residential tax burden, but his approach did not sit well with Republican council members.
Both Trawinski and Deputy Mayor John Cosgrove said Tuesday that Peluso’s proposed cuts would have done more to harm the borough’s taxpayers than their own proposed tax increase would.
To halve the proposed tax increase -- as Peluso had originally suggested doing – the borough manager and chief financial officer determined that council would have to lay off some 40 borough employees or implement more than a month of furloughs – neither of which appealed to any of the council members.
“I do not support furlough days after reviewing the numbers with borough manager Tom Metzler,” Peluso said Tuesday. “What we do support is looking for ways to help the residents here in Fair Lawn.”
Prompted by Trawinski Tuesday to specify how he would decrease residential taxes, Peluso recalled the budget wrap-up meeting in April where he had attempted to present alternatives to the proposed budget.
“We went through a list of possible ways to save the taxpayers money and towards the end of that discussion, the mayor said that she didn’t respect my vote on this and that she was appeasing me like she appeases her children,” Peluso said. “So that discussion was certainly cut off very quickly.”
At April’s budget wrap, Peluso offered a number of cost-cutting alternatives that the council unanimously approved -- like not filling currently vacant positions. However, when he began publicly raising the possibility of cutting specific employees – albeit by title, not by name -- the Republicans balked.
“I am prepared to make difficult decisions to do further cuts,” Trawinski said at the time. “But I don’t do them this way.”
After being rebuffed by all three Republicans, Peluso declined to continue suggesting other layoffs he had in mind.
“Government doesn’t work by saying ‘We want to cut from the budget,’ and shoot from the hip,” Trawinski said to Peluso Tuesday. “Government works when, collectively, the five of us participate in what we think is a good faith budget process, sit down and review that process…You can’t just sit there on a budget and throw stones.”
In spite of the proposed tax increase, this year’s budget actually appropriates $84,174 less and anticipates bringing in $555,826 more than the 2011 budget.
Since Metzler took over as borough manager on Jan. 4, he said he'd managed to cut more than $800,000 from the budget, calling it a "significant number."
“What we’re doing with this budget is we’re trying to be responsible," Baratta said before voting Tuesday to introduce the budget. "We’re trying to do what the people of Fair Lawn elected us to do."
A comparison of the past two budgets:
|Total Appropriations (Expenditures)||$46,167,326||$46,251,500||($84,174.11)|
|Surplus and Capital Surplus Used||$3,000,000||$4,947,297||($1,947,297)|
|Total Property Taxes||$35,868,571.01||$33,060,662||$2,807,909.01|
|Average Assessed Home||$323,679||$411,663||$87,984*|
|Estimated Municipal Tax on Average Home||$2,808.98||$2,687.23||$121.75|
*Change in assessed home value from 2011 to 2012 is due to a property re-assessment that was carried out in 2012