Maplewood’s preliminary budget presented

Maplewood’s preliminary draft of its budget is discussed in detail at the Township Committee meeting on Monday, Jan. 30.

MAPLEWOOD, NJ — Maplewood began forming its 2023 municipal budget with hearings on Monday, Jan. 30, and Tuesday, Jan. 31, with township administrators presenting a preliminary draft of the budget to the Township Committee on Monday, Jan. 30. The township is aiming to raise taxes by only 2 percent. Public safety, which typically is the largest line item in the budget, is again the largest this year, with approximately 31 percent of Maplewood’s assets funding the police and fire departments; other departments with large budgets include debt service and pension. The total proposed budget at the hearing is $54,607,834.

“You’ll find that this is not going to change year over year that much,” interim township administrator Gregg Schuster said at the meeting. “For any municipality, a majority certainly goes to public safety, debt service and pensions. Those are the three big ones that you’ll see in any municipality.”

Two thirds of the revenue comes from local taxes, according to Schuster. In 2023, Maplewood’s anticipated tax revenue is estimated to be $37,029,962; it is 68 percent of the budget. Chief financial officer Joe Kolodziej said at the meeting that there were several major budgetary events that affected the 2023 budget. The first is the EMS fee Maplewood would make in revenue for providing emergency services for nearby towns; since the merger of the Maplewood and South Orange Fire Departments into the South Essex Fire Department, $285,700 is no longer available.

The second change is Clarus Maplewood, which developed an apartment building on Maplewood Avenue. It will be paying regular taxes rather than the $208,700 Payment in Lieu of Taxes the company was paying previously. The third change is the Baker Street redevelopment project beginning a PILOT this year, which means the township will not be receiving $85,785 in taxes.

“Fortunately, we retired two bonds last year, so the net reduction for debt service is coming out to be roughly $1.5 million,” Kolodzeij said. “We reduced it by $2 million, but interest costs have risen on anticipation notes.” The total net reduction in debt service will be $1,574,063.
To keep the tax levy at 2 percent, the township is using all its available fund balance; it is an increase of $3,478,387. It is an increase of 232 percent compared to last year’s fund balance budget of $1.5 million.

“Because we are utilizing fund balance, those items that we saw before that would ordinarily be included in a budget will go into cap bank, so we can utilize it in 2024,” Kolodzeij said, referring to state health benefits, the township’s pension contribution and deferred charges as items that would not be in the regular budget.
In the proposed budget with the 2 percent tax raise, residents’ annual taxes would increase by $95.29 per year. According to Kolodzeij, the tax increase could be 6.9 percent if Maplewood does not use a banked cap.

“That ultimately causes a $320 increase for the year, and people’s mortgages would go up by $27 a month if we went full tilt,” he said. “This budget, because it is only going up by 2 percent, is not structurally sound. It is pushing off some of our expenditures that we’re going to need to pay into 2024, in order to achieve the 2 percent increase. So we have some work cut out for us, but as we pointed out previously, we are somewhere in the range of 2 percent and 6.9 percent. A decision is going to need to be made that the Township Committee is comfortable with, in terms of putting together and adopting a budget for 2023.”

Since 2019, yearly tax increases have ranged from 3 percent to 7.24 percent. If the 2 percent increase proposed for this year holds, it would be the lowest tax increase since 2018.
“Again, we’re just beginning this process,” Schuster said. “We want to make sure that everyone is fully aware of what the situation is, as we go in to discuss the expenses, revenues and the eventual tax rate.”

Other line items in the budget include $2,127,500 for the library; $1,126,705 for community development; $1,678,300 for community services; $5,863,900 for the engineering department and Department of Public Works; and $2,962,700 for utilities.
Aside from taxes, anticipated revenues include $2,024,693 in state aid; $688,594 in shared services; $201,248 in grants; $1,661,393 from the library tax; and $7,123,557 in miscellaneous revenue.