I’ve been mulling over what the upshot of the budget introduced late last month by the South Brunswick Township Council will mean for residents — aside from higher taxes — and I can’t for the life of me identify anything of note that will make taxpayers feel as though they are not just paying more money into a black hole.
This budget essentially is what the bureaucrats like to call a maintenance budget. It is a prudent budget, no doubt, conservative in its revenue forecasts and use of municipal surplus, but it also is a budget that is paying off several years of shortsighted actions on the part of township administration and the council.
In February, we wrote that “taxpayers will be getting … essentially more of the same.”
Spending is expected to increase by $3.83 million in 2007 — or 8.6 percent — but not to pay for new programs. The budget is, officials say, a maintenance plan, doing little more than keeping current programs in place.
This is not likely to make anyone happy. But it is, on some level, the council’s own fault, a result of bad decisions made over the last five years (spending down its surplus, delaying debt payments) that did little more than push the pain off to the future.
To be fair, there are several budget items that are out of the council’s control — including the massive increase in payments into the state’s pension system, payments that should have been made in much smaller increments over the last 14 years but weren’t thanks to the state’s own shortsighted approach to the pension system. Gov. Christie Whitman, with collusion of legislators of both parites, used an accounting trick during her tenure to inflate the pension funds’ value, allowing the state and local governments to reduce their contributions significantly, which helped pay for her tax cut. Her successors — Donald DiFrancesco and James McGreevey — all followed suit with some version of this shell game. The upshot is that we have a massive shortfall that needs to be made up. The new contributions — called for by Govs. Richard Codey and Jon Corzine — may seem like a lot of cash, but they are only a fraction of what is needed and the pain from years of budget gimmickry is likely to be felt in future township spending plans (not to mention he state budget).
That said, the proposed 15.8 percent tax increase — which will cost the average homeowner about $175 this year — appears unavoidable. The council has reviewed the proposed spending plan for about four months, making few substantive changes despite promises that the tax rate would be reduced.
I’d still like to see the council make some cuts — we had pushed the council to find between $1 million and $2 million in cuts or new revenues back in February, a task that probably was impossible given the realities of this budget — but that seems unlikely now.
The key thing for the council — and taxpyaers — to understand is that the township’s fiscal dynamics are changing. In the past, massive growth — in new housing and new commercial properties — offset the growth in spending and the new programs desired by residents. But that growth is slowing. As I said, we experienced a number of years of stagnant development, a trend that is likely to become the norm in the not-too-distant future.
We were lucky this past year. There was a huge upsurge in development that generated unanticipated construction fees and added assessments — properties that come on the tax rolls after the total tax levy is certified by the county, properties that pay taxes that had not been anticipated in the budget — creating a windfall of revenue that we haven’t seen in years. Until last year, the council essentially had been spending more money than it had been taking in for several years, causing a dwindling surplus account that left it in a precarious position.
The new development, including the massive new Target shopping center on Route 1, should help next year’s surplus, as well — it will not pay full tax payments until it is finished — as should several new senior housing complexes.
But it would be foolish for the council to count on this money, or for it to assume that this sudden growth spurt is likely to continue. The township is, as planners have noted, pretty much built to capacity. There are few large projects in the pipeline, though a moderate pace development will continue for a while. That means the revenues generated by development — added assessment taxes, construction and planning fees — will slowly dry up.
When it does, the council and taxpayers will have to confront the question of how to generate non-tax revenues — or, failing that, whether to raise taxes or cut programs that residents find valuable. It would be best if we could start this discussion today, before the situation becomes dire.
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Hank Kalet 