BERKELEY HEIGHTS, NJ -- When the special budget meeting of the Township Council began Monday evening, Mayor Angie Devanney provided an overview of why the administration and council members took another look at the budget -- The COVID-19 Pandemic.
New Jersey's Governor Phil Murphy, in an attempt to "flatten the curve" and keep the rate of infection down during the pandemic, has closed schools, large and small businesses, and instituted a stay at home policy. These measures have caused a great disruption in the economy, one which will probably result in a lower property tax collection rate, which, in turn, will hurt the township’s ability to pay its bills. Not just the bills to run the municipal government, but also its ability to pay: the “Berkeley Heights Board of Education, which makes up of 56.68% of your tax bill; Union county, which makes up 23.89%, and our public library, which makes up 1.5%, by statute,” all of which is collected by the township, then distributed to the three entities, Devanney said.
“Typically, the township has a 98.76% tax collection rate, which provides a guide by which the governing body can plan for services and paying salaries,” she said. Given the economic havoc being experienced by many residents, landlords, small businesses and corporations, the township can’t predict the rate of tax collection in the coming months and, therefore, can’t predict if it will receive enough money to pay its obligations.
Some loss of revenue can be more accurately predicted than others -- for instance, if the courts are closed, and they are, there will be no income from fines; if the hotel in town is not occupied, there will be no hotel occupancy tax received, etc. A list of cuts to anticipated revenue was compiled.
The mayor, Township Administrator Liza Viana, Councilwoman Jeanne Kingsley and CFO Eugenia Poulos and others consulted with department heads and found places where they could cut appropriations and capital expenditures.
During Monday’s meeting, Kingsley said, “We ended the last budget process on March 10 and that point we thought we had a solid budget. Then everything changed. Collectively, every council member has been scrubbing the numbers, Liza has been scrubbing the numbers, department heads, commissions. Collectively, everybody has put pencil to paper to see how we could make up the shortfall. Hats off to the staff and the governing body as well, because I think this is a budget that, if another shoe doesn’t drop and the world keeps going down the wrong direction, I think this will be a testimony to the whole team.
“We have done our best to try to find every dollar to match the revenue cuts without trying to hurt services. The goal of this budget is we will still maintain services to the revenues without ultimately raising taxes. Residents have to understand we are taking resources away from our staff, which is small to begin with, and people have to be understanding that we will do our best to get the work done - it might take longer because we will be working with less headcount over the next few months. We are losing a lot of summer interns ... extra hands at the DPW and the Sewer Department … It is teamwork, and we are in it together but the residents must recognize we are doing our best to not cut a service while doing our best to keep taxes flat."
Council President Alvaro Medeiros cautioned, “Everything is still a moving target. We are not there yet, we don’t know what will happen in the next several months. Most importantly, we don’t know how much we will collect in taxes. That can change our whole picture with the financial difficulty people will be in, in this town.”
Devanney said, “It’s important to note we are emphasizing the May tax collection period, but August may even be more difficult … the domino effect may be more profound in August than it is in May, so like Jeanne says,’We are doing the best we can, and we are doing it as a team.’”
All that hard work to cut costs and maintain services appears to have paid off -- Devanney said, “As of today bulk pickup is in the budget, and we are hoping that it stays … for now.”
Related Story: Budget Cuts Keep Municipal Portion of Property Tax Bill Flat