Government South Orange

UPDATED: South Orange Approves 2019 Budget With 1.99% Tax Levy Increase

Updated April 8, 2019: The South Orange Board of Trustees passed the 2019 South Orange municipal budget tonight with a 1.99% tax levy increase at its April 8 meeting. In light of Maplewood’s issues, there was a thoughtful discussion with CFO Chris Battaglia about the fund balance/surplus which Battaglia said will be at its highest level in five years this year – something that helps the Township’s bond rating and ability to have cash flow and respond in emergencies. He said he was very comfortable with the fund balance and felt that the Village was passing a responsible budget.

Slide from South Orange 2019 Budget presentation, March 11, 2019

On March 11, the South Orange Village Trustees voted to introduce a $37.7 million budget for 2019, with a 1.99% tax levy increase.

Village Administrator Adam Loehner pointed out that the Township has kept the tax levy increase at or under the 2% cap mandated by the state every year since 2011. According to Village Green’s reporting, the news is actually better: This is the municipality’s 10th consecutive budget under the 2% cap — reaching back to 2010.

Village President Sheena Collum stressed that bringing in a budget under a mandated cap is no easy feat — and not a foregone conclusion. “I think there is a misunderstanding about what the 2% cap means,” said Collum. “The law has been written so that there are plenty, plenty of exceptions … and so when we present at below 2%, it’s all in. … We’ve never used our banked cap.”

Loehner noted that the largest expenditure in the budget is public safety (police and fire) but that debt service and capital projects were now taking up more of the budget as the Township tackled public building projects that had been put off for years.

Loehner said that the increase in the South Orange levy translated into about an $108 increase on the average assessed home in South Orange — or $27 a quarter. He said that he felt that the budget was a good effort to maintain services while holding the levy increase at the lowest level possible — despite greater than 2% increases in salaries.

According to Loehner, the municipal portion represents 27% of South Orange residents’ local tax bill, with the school district representing 56% and Essex County the remainder.

Although South Orange has averaged a 1.7% levy increase in the past ten years — as compared to a 5.75% in the previous decade — Collum noted that the Township might need to use banked cap in the future due to all the infrastructure projects in the works.

She also warned residents that they should plan for being “hit” with the debt service for the $140 million school bond next year. “That is on top of the 2% that we can expect from the schools.”

Unlike the school district, Collum said that the municipality has the ability to generate revenue with development (note the numbers on Payments in Lieu of Taxes  — or PILOTs — as well as construction fees in the revenue slide), efficiencies and other streams. However, she reported that the school district did have some positive news in that the state did increase state aid by nearly $600K this year over last — an amount still well beneath the pre-2010 state aid numbers, but a “good news” nonetheless.

Trustee Mark Rosner noted that the state often gives with one hand and takes away with the other as the Township was hit with a $600,000 increase in its share for pensions due to a loss in aid from the state. However, he and Collum and other Trustees noted that pension payments should be coming down in future years due to renegotiated contracts.

Nonetheless, Rosner said, “You can see how tough it is to stay at 2%.”

The budget resolution was introduced upon unanimous vote. Loehner said that the Township would soon announce a Citizens Budget Advisory Committee meeting to garner further public comment. Those with questions or comments can also email [email protected]. The Board of Trustees will hold a public hearing on the budget at its April 8 meeting, at which time the Board will take action.

Regarding the impact of other budgets on local taxpayers, Trustee Deborah Davis Ford said that the Essex County levy this year was a little over 2%. The school district has introduced a budget a 2.3% budget levy increase.

Watch the budget presentation and discussion beginning at 1:30 in the video here. 

Download (PDF, 321KB)

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Related stories:

South Orange Looks to Approve $37M Budget With 1.9% Tax Increase, April 23, 2018

South Orange Approves 2017 Budget With 1.7% Tax Levy Increase, July 31, 2017

South Orange Approves 2015 Budget at 1.61% Tax Levy Increase, August 25, 2015

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