Politics & Government

First Look at '13 Budget 'Doesn't Sit Well' with Council

Township council is faced with tough choices after its first look at the budget, including finding a way to reduce a proposed 9 percent increase in the tax levy.

Town council got its first look at this year’s budget Tuesday night, and it wasn’t pretty.

The township lost nearly $1.5 million in tax revenue due to appeals in 2012, and council will have to make some tough decisions to balance the 2013 budget. The very preliminary version council saw Tuesday, prepared by financial officer Tom Merchel, includes a $1.39 million increase in the tax levy from 2012.

Merchel laid out the reasons behind the increase, including:

  • A $400,000 increase for deferred charges
  • A $253,000 increase in debt service
  • A $200,000 increase for salaries and wages

The biggest hit however came from the significant losses due to tax appeals. Over the last five years, the township has lost roughly $4.3 million from property owners appealing their assessments, $1.48 million of which came last year, according to Merchel.

The good news, he said, is that due to the reassessment, the township should see much fewer appeals—successful appeals at least—in 2013.

There was little else in the way of good news though, with Merchel at one point remarking, “This is something you want to have a nice glass of wine with and take it all in.”

The total budget—$23,959,092—is a $1.5 million increase in appropriations from last year. Merchel plugged $1.8 million from the township’s surplus to soften the deficit, including $185,000 in revenue from the sale of liquor licenses.

Merchel explained it isn’t wise to dip too deeply into the surplus, a sort of rainy day/emergency fund for the township (for things like covering tax appeals). However, Deputy Mayor Chris Chiacchio questioned why—since the township has approximately $5 million in the fund—they weren’t using more to help balance the budget, pointing out that the reassessment would stem the tide of appeals going forward.

“I understand the explanation. It doesn’t sit well,” Chiacchio said. “It’s hard for me to reconcile we have $5 million in surplus and we’re raising taxes 9 percent.”

Chiacchio pointed out that many property owners will experience a double whammy if the township raises taxes this year: 40 percent of property owners will see their taxes go up due to reassessment, on top of the 9 percent increase in the levy.

Merchel stressed the need to keep a healthy balance in the surplus, using the practices of previous town councils as a cautionary tale. They would drain the fund each year to keep taxes artificially low, he said, until one day there wasn’t enough money left to do it.

“Before you get into using it, I want you to see how fast it falls,” Merchel said, showing council members how the surplus dropped each year until it sank to $1.2 million at the beginning of last the year. It was only thanks to a $4 million infusion from sale of liquor licenses, a spike in construction fees and some money from the Low and Moderate Income Housing trust fund—all one-time cash infusions—that the township got the surplus back up to $5.2 million, he explained.

A few more highlights from Tuesday’s meeting:

  • The 2013 budget does not include debt service for the town hall project or the Wesley Bishop field project. The township won’t start paying those off until 2014.
  • The township is able to raise the tax levy beyond the state’s 2 percent cap due to building up its cap bank over the last few years.
  • Nineteen percent of the appropriations in the budget are for public safety; 13 percent for public works.
  • Merchel said it’s not really worth investing the liquor license revenue because state statute won’t allow the township to invest the money for more than a year, and “to get higher rates you need to lock it up for longer.”  

Council will hold more budget workshops over the next few months before adopting the final budget. Stay with Moorestown Patch for continuing budget coverage.

Find out what's happening in Moorestownwith free, real-time updates from Patch.


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here