On Second Anniversary of State's Tax Cap, Area Mayors Discuss Fiscal Changes
Thursday, July 12, 2012 • 6:48am
Two years ago today, Governor Chris Christie signed the two percent tax cap bill that would clamp down on how much municipalities could raise property taxes.
While tax bills that are smaller – or at least didn’t go up – may have elicited a sigh of relief from residents, municipalities have had to hone their focus on how to best stay under the cap while maintaining the level of services taxpayers have come to expect. Going over the cap would mean taking the budget before the voters for approval.
Today, area mayors say their towns have been adjusting to the new rules, although not without some pain along the way. Some municipal jobs were cut, those who have retired were not replaced, salaries and benefits have come under the microscope, and “shared services” has become the mantra as town officials try to figure out how to make it all work.
“It’s a good thing,” said Berkeley Heights Mayor Joe Bruno. “Something had to give. Capping taxes has made us take a closer look at how we deal with our employees, their benefits, and how we run the town in general. We have to watch our pennies a lot more now, but taxes couldn’t just keep going up.”
The problem, Bruno said, comes when a municipality has to look at areas like roads, bridges, sewers, and municipal buildings that could use some help.
“In Berkeley Heights, we have an aging infrastructure that needs to be addressed, and I’m not sure we’ll ever have or be able to borrow enough money to take care of it,” he said. “Towns that got their new town halls and police department headquarters and such rebuilt before the two percent cap went on are fortunate. It’s going to take some real creative financing for us to get something like that done now.”
Berkeley Height established a Capital Improvement Plan this year, which Bruno credits largely to the council president and vice president.
“It’s good to have a financially savvy council,” he said. “We do need to make sure every penny is spent wisely. We may go around and around sometimes about how to do it, but everybody is putting their thinking cap on and working in the best interest of the town.”
Summit Mayor Ellen Dickson called the tax cap a “psychological barrier.”
“We have not come close to the cap in the past couple of years,” she said. “We have stayed between one and two percent, and we’ve managed the city well within the cap.”
The problem in Summit, she said, are the Union County taxes, which are up more than 11 percent.
“The cap works for cities and for schools, but unfortunately, the county has found ways to increase taxes well above the cap,” she said.
Such issues are all part of what Bruno said is the education everyone in New Jersey is getting as municipalities adjust to the law.
“Yes, your taxes may have changed, but other things are going to have to change now as well,” Bruno said, adding that consolidation of some services and sharing of others has been deemed by many municipalities to be a viable solution.
“We need a real evaluation of what state, county and local governments should be doing,” he said. “We’re just scratching the surface. The governor has put a microscope on it, which is a good thing. There is no mystery here. If you want to control taxes, look at your payroll, look at benefits, look at duplication of services. The truth is, we do have too many services. It goes back to colonial times when all these little towns were doing their own thing. It’s a different world now. We can’t be afraid of sharing services.”
Part of the issue, many municipal officials have asserted, is that most residents are in favor of sharing services – as long as it’s not their town that has to give anything up. And that, Bruno cautions, isn’t how it works.
“When you bring the idea of sharing services to the people, everyone wants to keep their own services,” he said. “It’s like Einstein’s theory of insanity: doing the same thing over and over again and expecting different results. If we want to keep property taxes down, we have to keep our options open. We can’t be afraid of sharing services.”
While most municipalities spent the first year after the new law went into effect dealing with the cap by reducing jobs – cutting part-time positions or through attrition and furloughs, for example – by the second year, it was time to dig deeper. That’s when taxpayers felt the pinch a little more.
After the October 2011 snowstorm dropped not only snow and ice but also leaf-heavy branches or entire trees on the area, residents piled branches by the curb and waited for the towns to cart them away.
“People would call us, frustrated and angry, and want to know why their branches hadn’t been picked up yet,” Bruno said. “I’d have to tell them that we only have one chipper and I don’t have the budget to buy another one, or to pay overtime to the crews. It’s an ongoing issue. People have to know that we’ll do everything we can to keep the level of service as high as possible, but under this new cap, we have to cut somewhere.”
In addition to privatizing some services that are not key, Dickson said Summit has been able to tighten its belt by relying more on available technology to communicate with residents. The city has a new website that allows people to report problems directly to city hall. Dickson herself is a huge proponent of social media, using Facebook and Twitter to get important, relevant news and information out to her constituency and save the city printing and postage costs.
Millburn also has saved money by keeping an eye on salaries and services, but Mayor Sandra Haimoff cautions that the township has likely not yet felt the full brunt of the new law.
“We had to look at reducing non-essential services, which led us into privatization of services like garbage collection, and doing away with the recycling yard in favor of curbside recycling,” Haimoff said. Such cost-cutting measures, along with more sharing of services, enabled the township to save $800,000 without losing services or personnel.
“But we also tell people not to look for a decrease in their taxes, we’re just keeping property taxes from escalating,” she added. “Right now it’s fine, but people are going to be upset when at some point we have to start dropping services in order to save money. That’s when the impact of the property tax cap will really be felt.”