Boro introduces $21M municipal spending plan
Public hearing on 2008 budget set for May 14
BY DANIEL HOWLEY Staff Writer

EATONTOWN - The Borough Council is expected to hold a public hearing on its proposed $21million spending plan for 2008 onMay 14 at borough hall on Broad Street.

The proposed budget was introduced at theApril 9 councilmeeting and calls for borough taxpayers to raise a $12.6 million tax levy.

If council approves the spending plan, borough residents would see a tax rate increase of 4.1 cents, or 8.7 percent, over last year's spending plan.

"Just so everybody understands, I think we reviewed every line item in the budget," said Councilman John Schiels, who also heads the finance committee on council.

"We reviewed, I believe, 139 line items. It's hard to slash a budget sitting in a chair, twoweeks before it's due, amonth before it's due.

"But I think what this [finance] committee discovered is that there are some avenues that we are still pursuing as far as saving the town money," Schiels said.

The proposed municipal budget calls for an increase from last year's 47.2 cents per $100 of assessed land valuation to 51.3 cents per $100 of assessed land value.

As a result, the average borough taxpayer with a residence assessed at $450,000 will see an annual increase of $184 in their municipal taxes.

The average borough taxpayer will pay approximately $2,308.50 inmunicipal taxes annually under the proposed spending plan.

According to borough auditor Robert Oliwa, one of the prime reasons for the tax increase is the decline in the borough's net valuation taxable.

The net valuation taxable is the approximate worth of all taxable properties within the borough, according to Oliwa.

Oliwa explained that due to the drop in property values throughout the borough, the property values that the borough can collect taxes on dropped approximately $34million.

If the net ratable base had not declined so steeply, the municipal tax rate increase would have been 3.4 cents, or a 7.2 percent increase, according to Oliwa.

In addition to the reduction in the borough's net ratable, the borough also suffered a decrease in tax aid, according to Oliwa.

Recent reductions in state aid tomunicipalities resulted in a tax increase of $63 annually, Oliwa said.

One of the major increases in the 2008 proposed spending plan is employee pensions, which increased 55 percent over last year's spending plan, according to Oliwa.

Under New Jersey Division of Pensions andBenefits (NJDPB) guidelines, public employersmust contribute to the pension funds of their active employees.

Until the 1990s, state municipalities were required to pay a portion of their employees' pension into the state pension fund.

During that period, the state's pension fundwas adequately funded enough to grant municipalities a moratorium on pension payments for their employees.

In the early 2000s, the state's pension fund fell below 100 percent due to an increase in state employees and in salaries.

As a result of the drop in the state's pension fund, the NJDPB lifted its moratorium on municipal contributions, causing an increase inmunicipal taxes to cover employee pensions.

Other spending increases in the proposed 2008 budget include a 6.6 percent increase in spending for insurance andworkers' compensation payments for borough employees.

There is also a proposed spending increase of 2.9 percent for police salaries and wages.

Schiels said that the finance committee believes it has identified potential cost-savings strategies for the future, such as working with the borough school district and working with other towns in the area.

Schiels said he hopes the cost-savings strategieswillmake a positive impact on the budget within six months.