$193K a Year More in Open Space Taxes Proposed

Madison's Open Space, Recreation and Historic Preservation Trust Fund will bring in $193,000 more in taxes a year over previous years under a proposal introduced by the Borough Council on Monday.

Some residents who spoke at the meeting said they wish open space taxes were going up even higher to help pay back money borrowed for the Madison Recreation Center and fund new projects.

Councilwoman Jeannie Tsukamoto, meanwhile, said she wishes the open space tax levy was not going up quite as much and voted against introducing the measure.

Without any Borough Council action, an even larger tax hike is poised to take hold automatically because the assessed value of Madison's tax base increased by around 60 percent with the borough-wide revaluation this year, and the amount of open space tax collected is tied to property assessments, which Councilman Ben Wolkowitz has called a "stealth" tax hike.

In that sense, the proposal is a compromise, Wolkowitz said Monday.

The Borough Council introduced an ordinance Monday night that would lower the municipal open space tax rate from 2 cents per $100 of assessed value to 1.8 cents.

That would bring in approximately $609,000 in open space tax revenue—up from the $416,000 a year the fund has raised through taxes since it was established by a popular 2003 public referendum.

The proposed amount takes into account anticipated Madison Recreation Center debt payments while leaving an approximately $200,000 "cushion" to cover any unexpected shortfalls in fundraising by the Madison Athletic Foundation, which is partnering with the borough to pay off the debt, or to fund new projects.

The open space tax levy is poised to increase to $676,000 if the tax rate stays at 2 cents per $100 of assessed value.

For a homeowner with property assessed at the borough average of $667,000, their open space tax bill in 2013 would be $120 under the proposal, $38 more than in 2012. If no action is taken, it would be $134. That's out of an estimated total tax bill, including school, municipal and county taxes, of nearly $11,600.

Council President Carmela Vitale and council members Bob Landrigan, Astri Baillie and Wolkowitz voted to introduce the ordinance. Tsukamoto voted "no," saying she would have supported a $100,000 cushion that was presented at the previous council meeting. Councilman Rob Catalanello abstained, saying he was obligated to show the proposal to the Madison Athletic Foundation first.

David Luber, a member of the Madison Historic Preservation Commission, and Chris Kellogg and Lisa Ellis, members of the Open Space, Recreation, and Historic Preservation Advisory Committee, were among those who spoke in favor of keeping the tax rate at 2 cents per $100 of assessed value. Luber said funds are needed for when things go wrong, Ellis said environmental remediation efforts and various field upgrades are needed.

"Why the rush to change the tax at this moment?" Kellogg asked. He said the tax has many uses that go across partisan divides and user divides, and that the conversation about the issue has been "rather weak and timid" to date.

A public hearing and Council vote on the ordinance is scheduled for April 22. A draft of the introduced ordinance is below.

ORDINANCE OF THE BOROUGH OF MADISON AMENDING ORDINANCE 4-2004 WHICH ESTABLISHED THE MUNICIPAL OPEN SPACE, RECREATION AND HISTORIC PRESERVATION TRUST FUND

WHEREAS, the voters of the Borough of Madison, in the County of Morris, State of New Jersey; approved a referendum on November 4, 2003 which recommended to the Borough Council the establishment of a Municipal Open Space, Recreation and Historic Preservation Trust Fund (hereinafter referred to as the "Open Space Trust Fund") to finance the acquisition and preservation of lands and easements for open space; active and passive recreation; preservation of natural resources, including water supplies; and historic preservation, and

WHEREAS, the Madison Borough Council adopted Ordinance 4-2004 on February 9, 2004 which established the Open Space Trust Fund; and

WHEREAS, Ordinance 4-2004 codified in part as Article 132-3(B) of the Borough Code established the formula to fund the Open Space Trust Fund through the collection of an amount of two cents ($0.02) per One Hundred Dollars ($100.00) of assessed valuation of each annual Borough property tax levy; and

WHEREAS, effective January 1, 2013, the Borough of Madison implemented a revaluation of all real property pursuant to an Order from the Morris County Board of Taxation; and

WHEREAS, the cumulative assessed valuation of all real property increased from $2,080,611,829 to $3,382,032,100 effective January 1, 2013 as a result of the revaluation; and

WHEREAS, due to the increase in assessed valuation, the Open Space tax obligation for each property owner will increase as a result of the revaluation unless the formula is changed; and

WHEREAS, the Open Space Tax revenues are needed to service the outstanding bonded indebtedness for the Madison Recreation Center (MRC) land acquisition and the development of two artificial turf fields and support facilities on site; and

WHEREAS, additional Open Space tax revenues are needed to complete paving, fencing and environmental remediation work at the Madison Recreation Center (MRC) site and complete improvements at the Bayley-Ellard recreational fields and maintain a funding stream to finance the acquisition and preservation of lands and easements for open space; active and passive recreation; preservation of natural resources, including water supplies; and historic preservation; and

WHEREAS, there is a $3,263,000 Bond Anticipation Note outstanding or the MRC turf field improvements and a $4,480,000 Bond Anticipation Note outstanding for the MRC tand acquisition; and

WHEREAS, it is anticipated that two Green Acres grants will be disbursed in 2013 and be available to reduce the outstanding MRC land acquisition Note balance to 2,888,000; and

WHEREAS, the Madison Athletic Foundation (MAF) has committed to raise $934,301 to reduce the outstanding MRC turf fields improvement. Note in equal installments over the next five years; and

WHEREAS, approximately $464,566 will be needed in Open Space tax revenues to pay the initial annual debt service and bond issuance costs; and

WHEREAS, approximately an additional $200,000 annually in Open Space tax revenue is required to establish a debt service reserve and fund additional eligible activities authorized by the approved public referendum and Ordinance 4-2004.

NOW, THEREFORE, BE IT ORDAINED by the Council of the Borough of Madison, In the County of Morris and State of New Jersey, that the 2013 Open Space tax formula is reduced from $0.02 cents per One Hundred Dollars ($100.00) of assessed valuation to $0.018 cents per One Hundred Dollars ($100.00) of assessed valuation to be effective for the third and fourth tax quarters of 2013 and the first and second tax quarters of 2014.