>Middletown is one step closer to finalizing it’s 8+ months over due budget.
It looks like the Township’s hearing in front of the Department of Community Affairs Local Finance Board has been rescheduled for August 26th, two weeks after the original date was cancelled for the lack of a quorum on the part of the LFB.
According to the LFB website Middeltown will be participating in two meetings that day, one a teleconference that will deal with the Townships plan to bond $955,000 in order to finance tax appeals and the second to decide whether or not Middletown can exceed the State mandated 4% cap on property tax increases. It seems that Middletown is asking the LFB to approve an additional $2.68M over the 4% spending cap.
Now I am not exactly sure how this works but I figure there could be two ways in which to figure it out.
Last year, Middletown raised $40M from property taxes, if the amount raised by taxes exceeds the 4%cap ($41.6M) by only $2.68M, then the resulting increase to the municipal tax rate will be 10.7% (3.17% below the initially proposed tax rate) which would bring the amount raised through taxes to $44.28M ($1.27M less than what was originally proposed).
The other way to look at it would be, if the municipal budget for 2010 exceeds the cap by 4% over the 2009 budget which was $61.8M, the increase would bring the budget to $64.27M. And if then Middletown gets the approval to exceed this by $2.68M above the cap, the budget would be $66.95M, which amounts to an 8.33% tax increase. If this turns out to be the case then who knows what the amount raised by taxes will be. It will depend on what is cut and what is bonded for.
Is your head hurting yet?
The bottom line on all of this however happens to be that given the current economic environment and Governor Christie’s desire to control spending, it would seem unlikely that the LFB would agree to exceed the 4% cap by such a large margin anyway. Therefore the Local Finance Board will do for Middletown what Gerry Scharfenberger and those in the majority have been unwilling to do, reduce spending, by ordering Middletown to do so, which in turned would lower the proposed 13.87% tax hike to some more manageable number.
Where will an additional $2M in spending cuts come from is anyone guess, but I wouldn’t be surprised if the township eyed the use of furloughs or additional layoffs (it was announced that 4 new police officers have recently been hired) along with reducing the budget surplus further from the proposed $4M target for the year in order to make it happen.
We’ll all just have to wait and see what the LFB dictates to Middletown.