SOUTH ORANGE, NJ — South Orange taxes are going up, but not by much. At the July 13 South Orange Board of Trustees meeting, the board members voted unanimously to introduce the 2015 municipal budget, which currently comes in at $33,530,565.05.
Resolution No. 2015-168 passed 6-0 to introduce the 2015 municipal budget, which shows a 0.6-percent increase in spending, with a 1.6-percent increase in taxes; the average South Orange taxpayer will see an $82 bump in property taxes, according to Barry Lewis Jr., the village administrator. However, Lewis said that this is still a preliminary budget and the board is “still looking to tighten it up,” and thereby slightly decrease taxes.
Lewis explained that, although the budget increased from approximately $33,308,000 in 2014 to approximately $33,530,000 in 2015 — only a $200,000, or 0.6-percent, increase — taxes are going up approximately 1.6 percent because of a declining tax base. Due to tax appeals, the aggregate assessed value of the village is down by approximately $5 million, leading to an overall tax increase.
“Some tax increase is just unavoidable,” Lewis said, mentioning some costs that continue to increase independently of village fiscal management, such as health and pension benefits, and insurance. He also added that all services offered in the past year will continue to be offered under the new budget.
“We didn’t use all available surplus because that can be dangerous,” Lewis said.
Lewis also said at the meeting that revenue is currently down by “a few hundred thousand dollars.” Although, he optimistically stated that “there is light at the end of the tunnel,” reminding residents that the 3rd and Valley redevelopment project PILOT will be coming online soon, paying $600,000 in lieu of taxes to the village in 2016.
Lewis said that most municipal budgets were due to the state already, but the village had applied and been approved for an extension by the state. The extension was necessary due to South Orange’s May elections; while most New Jersey municipalities hold their elections in November, South Orange’s May elections mean it must contend with new government members in the midst of budget talks. This year, the village gained new President Sheena Collum and new Trustee Jeffrey DuBowy, who filled Collum’s vacated board seat.
The extension seems to have proved useful to the village. Lewis said that some initiatives originally put in the budget by former President Torpey had been removed. “They didn’t seem to have the sentiment to stay in there,” Lewis said. Instead, some of Torpey’s focuses were replaced with some of Collum’s focuses.
Collum is championing completion of the Master Plan process, as well as setting aside money to match grants for façade improvements for businesses in town. Collum also said she wants to take a closer look at branding and marketing, especially as the recent decision to sell Village Hall to Landmark Hospitality to turn into a restaurant may push the village to reconsider using the historic building as one of its symbols.
While thanking the board and the various standing committees for their dedication and help in putting together this year’s budget, Lewis singled out Trustee Howard Levison, chairman of the Finance and Information Technology Committee. According to Lewis, the village is now spending less money on electricity, gasoline and telephone services thanks to Levison. Trustee Deborah Davis Ford added in that Levison was crucial in refinancing the village’s debt.
Davis Ford also reminded those present at the meeting that municipal taxes only make up a small percentage of what residents pay in property taxes; approximately 27 cents off every $1 goes to the village, with the rest going to the schools and the county. Lewis added that the village continually has lower tax increases than both the South Orange-Maplewood School District and Essex County.
Additionally, the board passed Ordinance No. 2015-13 on first reading, which would allow the village to increase the budget above the state cap of 2.5 percent to 3.5 percent instead. While there is a 2-percent increase cap on taxes, the increase cap for the overall budget is 2.5 percent. This ordinance, which is passed yearly by many municipalities as a formality in case of emergency, would allow the budget to increase to cover an unforeseen expense, but essentially only if that money could be taken from somewhere other than taxes.
Lewis explained that this ordinance is historically passed just in case of a “rainy day” and that, during his tenure as South Orange village administrator, the village has never even come close to the 2.5-percent cap.
While the budget introduction passed unanimously, this ordinance did not, passing 4-1-1. trustees Davis Ford, Walter Clarke, Stephen Schnall and Mark Rosner voted in favor, Trustee Levison voted against and Trustee DuBowy abstained. Collum clarified, however, that in order for an ordinance or resolution to pass, it needs to be carried by four votes — which this ordinance received.
Levison explained that he was against passing this ordinance because of the distorted perception is can give. He feels that it makes it look as if the village is planning to exceed the state cap and use more money, even though that is not the case.
“The probability of us ever using it is very close to zero,” Levison said, questioning the need to pass the ordinance at all. Should emergency money ever be needed, there are procedures in place to obtain it, he said.
Davis Ford, who voted for the ordinance, argued that those procedures take time and that having this ordinance makes sense because they would already have the banked cap.
“Why would we handcuff ourselves and not take advantage of what the state allows?” Davis Ford asked.
Lewis reminded everyone that the village can still go up to 2.5 percent and is currently at an increase of 0.6 percent — a number that is not even close.
A budget hearing will be held at the South Orange Performing Arts Center on Monday, Aug. 10. A breakdown of the proposed budget can be found online at www.southorange.org.