Municipal Tax Rate Held to 1.94%

The municipal tax rate increase for 2010 was shaved to 1.94% as Monday's Board of Trustees Budget Workshop Meeting concluded, and the trustees went into Executive Session. The municipal tax rate, the portion of a taxpayer's bill that returns to South Orange, was 28% of the total bill in 2009. County taxes were 16%, and school taxes were 56% of the total tax bill, a breakdown that is likely to be similar in 2010. The 2009 municipal tax rate was 3.9%. According to Village Administrator John Gross, each percentage point is roughly equal to $200,000. For a home assessed at $587,354, the increase in municipal taxes will total $81.

Seven members of the public attended the meeting, and the word of the evening was taxes. The Village's total Current Fund Revenues (CFR), or money coming in, is $33,221,506. Village President Douglas Newman noted that Total Fixed Costs have decreased 7.2%. Operating expenses have decreased 1.4%. However, personnel costs have increased 7.2%, largely due to health benefits and pension costs.

Earliest calculations in the budget process called for a 29.4% increase. However, successive meetings saw that figure decrease over a period of months. The previous budget workshop saw a 2% tax rate. Since that meeting, funding has been restored in a number of areas, including $1500 to YouthNet, $5000 to Main Street South Orange, $40,000 for Planning, $20,000 for a Business Recruiter. The total is largely offset by an additional $65,000 anticipated surplus.

When members of the community asked the trustees what steps are being taken to manage future increases, trustees cited discussions of shared services, outsourcing its violations bureau to Maplewood, and the decrease in number of Village employees over the past five years. However, the health care and pension costs, which are negotiated benefits, are fixed, often by binding arbitration. They are not fixed by the Village.

The budget does not include the principal and interest payment due from SOPAC in Sept. of 2010. Including this in Village calculations would not be "prudent," said Newman. SOPAC submitted its recent FT 990 tax forms to trustees on Mon. morning, according to Newman and fellow trustee Michael Goldberg. "No surprises," said Goldberg, who said his was only a cursory look at the forms so far.

When asked if back taxes from the Beifus lot were included in the Village calculations, Gross noted that taxes for individual lots were not specified. However, he and Newman noted that the Village collects nearly 100% of back taxes, either through payment or through tax lien sales.

Trustee Deborah Davis-Ford agreed with a member of the public that the Board needs to "communicate what we're doing better," noting that South Orange's 2010 tax rate is equal or lower to a number of neighboring communities.

The outcome of the Executive Session will determine whether further budget workshop meetings will be held. Last year's budget was adopted in Sept.