TC approves budget, raises taxes by 2 percent

This slideshow requires JavaScript.

WEST ORANGE, NJ — The West Orange Township Council approved the $79,707,320.17 municipal budget for 2017 during its May 23 meeting with a vote of 4-1, with council President Joe Krakoviak being the sole vote against it.

The budget — which is $1,312,293.82 more than last year’s — features a tax increase of 2 percent, the maximum allowed by state mandate. Specifically, the total levy went up to $55,000,478.89, which is $1,078,440.76 more than the 2016 budget’s $53,922,038.13. That total levy includes a municipal levy of $52,982,824.98 and the library levy of $2,017,653.91. Additionally, the township is collecting $145,460.49 through the open space, recreation, farmland and historic preservation trust fund levy.

The average West Orange homeowner will pay $65 more in taxes for 2017.

Such a raise was too high for Krakoviak. Prior to voting, the council president took aim at the fact that the township’s surplus was increasing by $124,000. He questioned whether adding to the surplus was really necessary when taxpayers were spending more for the levy.

“I know the administration likes the surplus,” Krakoviak said. “I like it too, but not at the expense of maximizing the taxes we’re imposing on property owners.”

Krakoviak suggested holding off on approving the budget so that the council could look for more ways to cut spending. At the same time, he said the township could get input from the newly reassembled Citizens Budget Advisory Committee, pointing out that having a different set of eyes on the document could lead to fresh insights. Mariel Clemensen, who was long the sole active member of the group until recently finding more members, indeed requested to meet with each council member individually before they voted in order to discuss matters like having a surplus policy to maintain the township’s AA credit rating.

But township CFO John Gross warned Krakoviak that there would be consequences for delaying the vote on the budget. Not only would West Orange be out of compliance with state law, but Gross said the township would also not be in the position to send out tax bills for the third and fourth quarters. As a result, he said the township would have to do estimated taxes plus incur the additional cost of mailing out the actual tax bills when they are ready. And if the delay is especially long, he said the township will not get a tax rate, which could lead to uncertainty among residents.

As for the surplus, Gross said reducing the $124,000 at this point will lead to an increase in taxes since the surplus is a revenue that would have to be made up. If the council president wanted to lower taxes by keeping the surplus at the same level it was last year, the CFO said he would actually have to reduce appropriations beyond the $124,000 increase he would be eliminating.

“Let’s say you wanted to lower taxes $200,000,” Gross said. “If you also reduce the amount of surplus that you anticipated in the budget, you have to find $324,000 in cuts in order to accomplish that.”

And finding cuts will not be easy, according to Jack Sayers, the township business administrator. He said most of the cost increases found in the budget are uncontrolled raises covering expenses such as the police and firemen’s retirement system, which went from $4,376,544 in 2016 to $4,578,563.29 in 2017. The township reduced a lot of line items it did have control over, he said. But to get even more savings, he said West Orange will have to make sacrifices.

“There’s only one way that you’re going to reduce money in this budget, and that’s laying off bodies,” Sayers said. “If you do that, you’re going to reduce services to the township.”

But most of the council members were not interested in pursuing that option, with Councilwoman Susan McCartney pointing out that the council started the budget season with the specific goal of avoiding layoffs. McCartney also questioned why Krakoviak was raising the idea of re-examining at the budget when the council members unanimously voted to approve nearly every page during the March budget hearing.

“I think that would be a contradiction now to say we should go back and review it or have other people review it,” McCartney said.

In response, Krakoviak said he did not view it as a contradiction because at the time of those approvals the council did not have revenues or the amount of the tax increase to consider. Still, the council majority was willing to pass the budget, with Councilwoman Michelle Casalino saying it is good for the township to have a significant surplus. In fact, she said two classes she took at Rutgers University recommended that municipalities keep 18 percent of their budget in reserve. West Orange is far below that, she said.

Casalino said she was also comfortable with the budget’s expenditures after having gone through the budget-hearing process and following up with department heads. She said she wishes the township did a better job of highlighting where its money goes. Though it would be preferable not to raise taxes, she said the funds collected pay for services that greatly benefit residents.

Councilman Victor Cirilo agreed that the money is spent on worthy causes such as paving roads, rehabilitating firehouses and improving sidewalks. The key, he said, is to find a balance between spending and raising revenue. And he believed the proposed budget did that.

Councilman Jerry Guarino, too, was in favor of approving the budget. Though some residents might balk at spending $500,000 on capital improvements, Guarino stressed that the expenses are worthwhile because those projects can keep facilities up-to-date and employees safe. Plus, he said, maintaining equipment is a smart investment.

“Spending the money now in your capital prevents you from spending more later on,” Guarino said.

Photos by Sean Quinn