Nothing extraordinaryabout South Brunswick budget

So the Township Council has approved its budget despite not getting the extra aid it was hoping to get from the state. That leaves township taxpayers facing a 5-cent — or 9.6 percent — tax hike.

The Township Council had hoped that state extraordinary aid totaling $700,000 would cut the tax hike by 2 cents, but the state saw through the ruse — South Brunswick is a rather well-off municipality and the extraordinary aid fund is designed to help towns like Jamesburg, which face huge tax hikes and have little ability to do anything about them.

South Brunswick’s fiscal problems, on the other hand, were largely self-inflicted — caused by the refinancing of debt and the decision to seek extraordinary aid two years ago. The township got the aid, but had no way of replacing the revenue last year or this year.

What makes the aid gambit such a gamble is that it requires the township to spent nearly all of its surplus. Surplus is a fairly straightforward concept. It’s generated yearly and is essentially the difference between what is raised in revenue and what is spent.

When a town uses surplus in revenue, as all do to some degree or another, it affects more than the current budget. The more surplus used, the more stress that puts on the next year’s budget. In the case of South Brunswick, it is using $4.3 million of its $4.7 million surplus. That will leave $400,000 or so in the account and require the township to generate at least that much before the end of the year or the township will face a fall-off in revenue. If it cannot rely on $4.3 million in surplus as revenue next year, it will have to find some other means of raising that revenue — most likely the taxpayer. Or it will have to cut the budget (which it should have done in the first place).

Township officials say they expect the surplus account to grow this year to $5.2 million. If that happens, the township should be OK — though I’d be concerned that the council would be tempted to use more surplus next year as revenue and not give the surplus account a chance to grow some and lend some stability to the budget.

South Brunswick Post, The Cranbury Press

Author: hankkalet

Hank Kalet is a poet and freelance journalist. He is the economic needs reporter for NJ Spotlight, teaches journalism at Rutgers University and writing at Middlesex County College and Brookdale Community College. He writes a semi-monthly column for the Progressive Populist. He is a lifelong fan of the New York Mets and New York Knicks, drinks too much coffee and attends as many Bruce Springsteen concerts as his meager finances will allow. He lives in South Brunswick with his wife Annie. View all posts by hankkalet