Municipal Aid Cut Worse than Expected

After spending the past few months contemplating how deep a state aid cut may affect the municipal budget, Wyckoff officials are now faced with the difficult truth: cuts are even more severe than feared.

"It's much deeper than we anticipated," said Committeeman Chris DePhillips, a member of the governing body's Finance Committee.

Wyckoff will lose $373,363 from its formula aid package under Gov. Chris Christie's proposed reductions in municipal aid. Should the governor's numbers stand, the township will receive $1,093,271 from the state to help draft the 2010 operating budget, a drop from $1,466,634 received last year.

The aid cut adds to the pressure of producing a balanced, lean budget with a relatively minimal tax increase.  Before receiving word of the state's plans, Finance Committee members and the administration had projected a  $16.9 million budget with a $11.1 million tax levy that would feature an expenditure increase of 1.85 percent over the $16.6 million 2009 budget. The increase would have roughly translated to an estimated $80 tax increase for residents, based on the average assessed home, approximately $800,000, DePhillips said.

Those projections were made under the assumption of a drop in state aid; line-item spending had been held mostly stable.

Even before knowing the size of the aid cut, "we were getting to the point where services are stretched, and the residents will feel the impact," DePhillips said.

Now, the budget drafters are forced to reassess all spending and expenditure requests, with certain limitations.

"We can't put the community at risk by cutting essential services," such as fire and police protection, said Committeeman David Connolly, chairman of the Finance Committee.

Still, cuts have to come from somewhere.

"To impose more cuts could mean that services will be interrupted or reduced," said DePhillips, who has been working with Connolly, Administrator Robert Shannon and CFO Diana McLeod to draft the 2010 spending plan.

However, both officials stressed that nothing has been decided.

"We have to revisit everything... it's back to the drawing board," said DePhillips, who added that the Finance Committee could make cuts across all line items or otherwise make specific policy choices on where to spend money. Connolly couldn't speculate on where any potential cuts may be made, but said the task "requires a lot of thought about the whole community."

The budget process is complicated by the existence of a 4 percent expenditure cap, essentially guaranteeing that the tax levy can only be raised by so much. With the loss of $373,363 in formula aid, DePhillips said the Finance Committee would be forced to find approximately $275,000 in savings to meet the cap, although he said that officials' goal would be to try not to have to increase the estimated average $80 tax hike, if possible.

And they will have to do it relatively quickly. The Township Committee had expected to introduce the budget this month and adopt it in April. DePhillips said today that the budget may not be introduced until April 6, with a goal of adopting the plan in mid-May.

Finance Committee members do not have a formal meeting scheduled as of this morning, but Connolly and DePhillips said they expect to work with Shannon and McLeod today to start "conceptualizing" how to make up for the drop in aid.

Both men said they understood the dilemma Christie faces as he tries to get the state's finances in order but are disappointed that a township such as Wyckoff is bearing the brunt of the funding choices.

"The towns with the lowest tax rates and the highest annual income are taking the biggest hit," DePhillips said. "We hoped you'd be forgiven (but) these are really significant cuts."

Connolly said the township has "always been fiscally responsible. It's a clear case of no good deed goes unpunished."

The $373,363 state aid cut represents a more than 25 percent reduction, which is more severe than many of Wyckoff's neighbors. Mahwah will see a 17.5 percent reduction; Midland Park, 20.5 percent; Franklin Lakes, 8.5 percent; Waldwick, 15.4 percent; and Hawthorne, 20.5 percent.

While the municipal reduction poses challenges, the Wyckoff and Ramapo Indian Hills school districts fared even worse under Christie's cost-cutting, losing their entire aid packages for the 2010-11 school year.