City Budget Approved, Draws No Public Comment

NEW BRUNSWICK, NJ - The City Council approved the 2011 budget that raises spending by $1 million from $76.2 million to $77.2 million.

The budget was amended by the governing body from a proposed $77.8 million to $77.2 million with additional cuts in general revenues and appropriations.

Overall, the tax rate is up 8 cents from $2.16 to $2.24, a jump that will add $94 to the annual tax bill for the average city home, assessed at $117,000, said city Business Administrator Thomas Loughlin.

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The municipal tax bill for that home would be $2,621.97.

The spending plan does not include layoffs or cuts in services and drew no comments from residents who packed the council chambers during the public hearing on Wednesday, June 15.  

The tax levy – the amount to be raised by taxes – climbed from $27.1 million to $28.2 million, which includes the minimum library tax of $1.1 million, according to the city Chief Financial Officer Douglas Petix.

Because the city operates on a calendar year budget, which begins in January, and the state operates on a fiscal year budget, which begins in July, the budget is developed based on estimated state aid, which is subject to change, Petix said.

“The number is pretty sure to be the same, but we can’t really guarantee that that’s going to be the number, but I would be surprised if it changed,” he said. “Once it passes near the middle of July, I’ll get a statement as to how much state aid we’re going to get and the dates that it’s going to be paid.”

State aid is estimated to remain flat at $14.2 million, a number still considered a significant reduction in allocated aid, Loughlin said, pointing out that in 1991, the city received $14.8 million in state aid.

“Over the last couple of years, we’ve sustained significant reductions in aid,” Loughlin said. “This year we’ve been advised that the state aid that we will receive … will be the same as the last. That source of revenue has not really kept pace with the rate of inflation.”      

Increases in the city’s pension obligations, which climbed from $1.6 million to $7.2 million, were a major factor in rising costs, Loughlin noted. Since 2004, when the total pension contribution was only $469,000, the city’s pension contribution has multiplied 15-fold, he said.

For the first time in two years, the city anticipates health insurance claims to climb by $647,000.

“We have made no assumptions in reduction of services or programs,” Loughlin said.“The mayor is always very clear about that when we start the budget process.”

Anticipating the retirement of more police officers by the end of the year, and to compensate for the eight who have retired since 2010, the budget calls for the hiring of seven new officers. Five of the seven posts have already been filled and the two remaining will be filled by the end of the year.

The budget also called for the hiring of seven new firefighters to replace the nine who have retired since 2010 and others expected to leave before the end of the year.

“The budget does not call for any layoffs or furloughs, but it does recognize that 12 full-time positions have been eliminated through attrition,” Loughlin said. “The budget does anticipate replacing some people but it doesn’t anticipate replacing anyone retiring between now and the end of the year.”

In light of the strained budget, the city is actively seeking ways to help ease economic pressures, including working with Highland Park to provide animal control services, and to shape agreements with the board of education and Middlesex County government to purchases services.

“We are trying to reduce spending where we can,” Loughlin said.

       

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