Maplewood taxes to go up by 6.9 percent

Maplewood residents will see an aberrant increase in municipal tax portion

MAPLEWOOD, NJ — At its April 2 meeting, the Maplewood Township Committee voted unanimously to introduce its 2019 budget, which comes in at $45,707,177, an increase of $594,002 from the 2018 budget. This is a 6.9-percent tax increase, which will cost the average Maplewood homeowner an additional $259.92 this year, according to Maplewood Chief Financial Officer Joseph Kolodziej.

“Surplus being used is significantly reduced from what it was in 2018 and that has been offset unfortunately by a tax increase,” Kolodziej said at the meeting, explaining that Maplewood’s expenses have only gone up by 1.3 percent. “In 2018, 64 percent of our revenue came from taxes and 7 percent came from checking account balances. And in 2019, because we didn’t replenish those checking account balances, only 3 percent is available for use and 68 percent now need to be shifted onto the tax burden.”

Kolodziej also explained why Maplewood is allowed to go beyond the state-mandated 2-percent tax increase cap. For several years now, Maplewood has been coming in under the 2-percent cap, allowing the township to bank the remainder of the 2-percent increase not used in case of emergency. This year the township is dipping into that bank and using it to increase taxes by 6.9 percent in order to balance the budget. Essentially, Maplewood taxed property owners less than it could have in previous years and now needs to make that up this year.

“It’s not a good picture this year, but we took a big spike in the debt service this year, almost $1 million of increase in debt service,” township auditor Joseph Faccone said at the meeting. “That’s going to level out next year. You’re not going to have that kind of a spike again; there might even be a reduction in debt service next year.”

Kolodziej said debt service spiked for the township intentionally this year to avoid having to pay more on debt service in coming years.

“Wisely the Township Committee recognized that interest rates were rising and accelerated converting our bond anticipation notes into actual permanent financing of bonds,” he said. “When we did that back in June and we accelerated it, normally the Township Committee has had the policy where they’ve waited to sell a bond until we’ve retired on it so that we maintain a nice level $4 million or $5 million in terms of debt service, but because of the way interest rates are moving, in my professional opinion, the Township Council made the right decision and sold those bonds early.

“The result of that is that we picked up this year needing to make interest and principal payments so the bulk of the debt service — $950 some-odd-thousand — is a function of now needing to pay back bond principal. Prior to that we were only paying a portion of that,” he continued. “We should see a leveling off next year and in the following years we should start to see a drop in our debt service as we catch up with the fact that we accelerated our sale a couple of years early.”

Township business administrator Sonia Alves-Viveiros added that the township is looking into the state health benefits plan and possible privatization, which could save nearly a million dollars for next year’s budget.

According to Kolodziej, the bulk of the 2019 budget, as in past years, is going to public safety. According to his presentation, $21,024,093 will go to salary and wages; $15,858,444 will go to “other” expenses; $1,200,000 will go to the reserve for uncollected taxes; $720,839 will go to shared services; $182,800 will go to capital improvement; and $6,721,001 will go to debt service. As for revenue, $1,280,215 will come from surplus used; $5,992,505 from local revenue; $1,834,693 from state aid; $807,500 from construction; $613,608 from shared services; $94,232 from grants; $1,805,200 from miscellaneous revenue; $1 million from delinquent taxes; $30,877,748 from municipal taxes; and $1,401,476 from the library tax.

Mayor Vic DeLuca reminded that municipal only make up approximately 27 percent of property owner taxes, with the lion’s share going to the school district and the rest to the county.

“This is a substantial increase for the municipal portion. I think in past years we tried to use every dollar we could find, that we could squeeze out of every pot, so that we didn’t have to raise taxes, so that we could provide at least some cap on the increase. I guess now we don’t have any more of those pots,” DeLuca said, adding that Kolodziej is asking the town to be more attuned to building a fund balance going forward. “Taking the hit here is going to help us overall.”

The Township Committee will hold a budget hearing at its May 7 meeting before voting to pass it.