Borough Taxes May Increase Five Cents in 2005 Budget

Candace Braun

Borough residents could face a five-cent increase in taxes this year if the proposed 2005 budget is approved by Council, according to a report given by Borough Administrator Bob Bruschi at Council's meeting last week. The increase will bring taxes up to 89 cents per $100 of assessed valuation of land.

Mr. Bruschi also delivered news that, in accordance with Council's projection for 2005, the budget reflects no increase in expenditures from 2004, with a budget of $21.93 million. This was good news for the Borough, as one month ago the Borough announced a potential nine- or ten-cent increase in taxes again this year. Council unanimously approved the introduction of the budget, slated for public hearing on April 5.

After a tax increase of 12 cents last year, the Borough has kept a watchful eye on its expenditures, making cuts wherever possible to keep taxes down in 2005. Some of the actions the Borough has taken include changing the health benefits plan for employees, which saved $244,000, as well as leaving six Borough positions vacant, including two police officer positions that will remain vacant for 12 months, after which the necessity of the positions will be reexamined, said Mr. Bruschi.

If the five-cent tax increase is approved by Council, taxes will have increased 27 cents since 2000. Taxes only increased two cents between 2000 and 2001, then doubled to four cents from 2001 to 2002, and again from 2002 to 2003. After quadrupling to 12 cents from 2003 to 2004, the proposed budget for 2005 is still raising taxes more than it was a few years ago.

Some new or increased revenues have helped improve the budget this year, including Princeton University's contribution, which is up $300,000 from last year. The University had made a promise to give $50,000 more than last year; however, it exceeded that with a total donation of approximately $814,000. Without this donation, taxes might have gone up seven or eight cents rather than five, said Mr. Bruschi.

Construction code fee revenues are also up $262,000, and the reserve for debt service is up $96,000, which means that after using up the $600,000 in reserve last year, the Borough made $696,000 this year.

"Revenues are far in excess of what we had envisioned last year," said Mr. Bruschi.

However, there were also decreases in certain revenue areas this year, including municipal court fines, down $81,000. State funding was also down, as the Borough received $180,000 in extraordinary aid last year that it will not receive again this year. Homeland security funding was also down $70,000. All of these revenue decreases led to a five-cent tax increase despite no increase in expenditures, said Mr. Bruschi.

The Borough is anticipating bringing in $2.5 million in parking revenue this year, with $1.1 million in direct revenue to the municipality. However, with the opening of the Spring Street garage, the Borough has its first full debt service payment this year of $786,231, which excludes its full year payment of operating costs.

Getting the other projects downtown completed in the near future is critical to future budgets, according to Mr. Bruschi, who added that if the Witherspoon House had been completed by now, there would have been no tax increase this year for Borough residents.

With a capital improvement plan budget holding at $3.7 million, Mr. Bruschi said the Borough will face some tough decisions on future road projects in order to keep the budget down, including the maintenance of Mercer Street, Cleveland Road, and Witherspoon Street, which will all need repairs over the next few years. Sewer and road projects comprise two-thirds of the capital budget, with the rest going toward items such as replacing vehicles, which can be held off for a year or two depending on the circumstance, said the Borough administrator.

After the budget's public hearing is held on April 5, Borough Council is looking to adopt the budget by mid to late April.