Council to Vote on Budget with 2.5-cent Tax Increase

South Brunswick taxpayers can expect to see an increase in their municipal taxes after the township puts the finishing touches on this year's budget.

The Township Council will vote at their next meeting to adopt a budget that carries a tax increase of about 2.5-cents, which would raise the tax rate from about 72-cents to about 74.5-cents per $100 of assessed valuation. The new rate would bring an annual municipal tax increase of approximately $40 for homes assessed at the township average of $188,400.

"We are still working on it, but I'm satisfied with 2.5-cents," said Mayor Frank Gambatese. "If everything goes okay, then we will adopt it at our next meeting."

Under the mandated 2-percent tax cap, the township was permitted to raise taxes by about 10-cents due to the cap allowing the addition of health, pension and emergency costs. 

In 2012, the council approved $47.9 million budget that held the tax rate firm from the previous year at about 72-cents per $100 of assessed valuation.

The township experienced another  which alone would've accounted for a 2-cent tax rate increase for the coming year, according to township officials. South Brunswick also had to account for spending on emergencies such as Hurricane Sandy, which will eventually be reimbursed by FEMA, but must still be included in the spending plan.

Combined with about  those losses could've accounted for an additional 1.68-cent tax rate increase. Pension costs also rose in South Brunswick by $72,000 last year. The township's pension costs increased by nearly $4 million over the last seven years. 

However, on the positive side, South Brunswick saw an increase in revenue from several areas, including new construction, which collected $2.4 million in permit fees.

"Things are improving and we saw construction fees grow from about $800,000 to almost $2.5 million," Gambatese said. "We got three times the number of buildings built in 2012 than we did in 2011, so I see the economy picking up and that's always a good thing. Our basic problem has been tax appeals, which have offset revenue from new businesses."

Revenue from a hotel tax brought in an additional $80,000 last year, revenue from cable fees increased by $227,000, and revenue from court fees rose by about $27,000. South Brunswick will also save a projected $500,000 by switching health care providers.

The full South Brunswick tax rate last year was $4.49 per $100 of assessed valuation, with municipal taxes accounting for 16 percent of that total and school taxes accounting for 63.5 percent of that total, according to Chief Financial Officer Joseph Monzo.

In March, the South Brunswick Board of Education approved a $138.5 million spending plan for 2013-14 that will carry no tax increase for residents. The budget reduced the tax levy by about $239,000 to $96.2 million, and held the tax rate firm at about $2.85 per $100 of assessed valuation. 

Earlier this year, Middlesex County adopted a $410.96 million dollar budget that carries an increase of about 2 percent, meaning the average county tax bill will come in at about $1,537.

South Brunswick's average municipal bill last year came in at $1,589.53, below the average municipal bill statewide of $2,324.66, according to Star Ledger analysis.

"I think that we've done a good job, especially when you compare it to the other towns around us," Gambatese said. 

On the question of whether the township could've reduced the budget down to a zero increase again, the mayor said doing so would've left South Brunswick in a precarious position in case an emergency were to occur.

"We don't want to take every dollar that's in the township surplus," Gambatese said. "We could have gone down another half-cent, but it's at the point where you don't want to go too much lower. If an emergency comes up, you need to have money in there to take care of it."

The council is expected to vote on the adoption of the budget at the next scheduled meeting on May 7.