$95 Tax Hike in Latest Budget Presented to Council

Financial officer Tom Merchel recommended a budget Monday that reduced the tax increase for this year, but council members still weren’t entirely satisfied with what they saw.

In the version of the $22.7 million budget Merchel recommended to council, a taxpayer with a home assessed at the township average ($529,800) would see a $95 increase in their taxes from last year, a $40 decrease from .

Merchel said he achieved the reduction through a combination of a $100,000 decrease in health insurance costs and by transferring roughly $165,000 from the township’s housing trust fund to the general fund, along with some smaller adjustments.

Another version of the budget Merchel presented to council brought the tax increase to zero by using $850,000 from the utility surplus—an option the financial officer did not recommend because it would put the township in a hole in future budgets.

Councilman Mike Testa and Mayor John Button agreed with Merchel, saying the use of the utility surplus to balance the budget seemed “gimmicky.”

“Also, not everyone pays fees for utilities. But everyone would realize the benefit from not having a tax increase,” said Testa. “It’s redistribution, and I don’t support that.”

Testa and Deputy Mayor Greg Gallo said they felt the township could do still better and wondered whether Merchel could find alternative ways, without using the surplus, to chip away at the tax increase.

“People are still struggling. A tax increase is not something we should take lightly, even if it is small,” said Gallo. 

Councilwoman Stacey Jordan advocated a compromise: split the amount used from the utility surplus in half, bringing the tax increase down to a more agreeable $50.

“It’s a fine line we have to walk between using too much from the surplus and leaving too much on the table,” she said. “I just don’t want to put an undue burden on the people.”

Merchel also pointed out he had used $1.175 million from the general fund surplus to balance the budget, leaving only $62,000 left until it’s built up again next year.

“So if something goes wrong, we’ve got a problem,” he acknowledged. “But (that amount) has been consistent (with what’s been used in previous years).”

Merchel also forecasted the budgets for 2013 and 2014, factoring in and reduced expenses .

His projects call for a “worst-case scenario” 6.2 percent tax increase in 2013, but no tax increase in 2014, which is also partly due to a nearly $700,000 drop in the debt service in 2014.

Council directed Merchel to prepare two budget scenarios for next week’s meeting: one that uses $425,000 from the utility surplus to cut the current projected tax increase in half, and another that calls for more cuts—potentially to programs and services—to bring down the tax hike.

Button said council will “try to drive to a consensus” on the budget next week, with the intention of finalizing and introducing it.