SOUTH PLAINFIELD, NJ – The South Plainfield Borough Council, at a meeting May 18, introduced its 2020 municipal budget. The proposed $31,331,040.49 spending plan will be presented to the public during a meeting June 29.
The proposed budget is a $325,656 increase over the prior year’s spending plan of $31,005,384. Of that total, $21,647,992 will be offset by taxes to fund municipal and library operations including but not limited to, public safety, debt service/principal payments, health insurance costs, and community pool.
The budget-to-budget increase is up just a little over 1-percent from the current year, and, according to borough officials state that the tax increase is mostly due to the current healthcare crisis.
‘Drivers’ in the budget, said Borough Administrator/CFO Glenn Cullen, include ‘significant revenue losses due to COVID-19,’ including but not limited to, loss of revenue from hotels, court fees, and the building department. “The borough, like everyone else, is being affected by this economic downturn,” said Cullen.
Prior to the state shutdown, the borough received approximately $80,000 a month in building fees; $55,000 in court fees; and $35,000 in hotel fees. Those numbers, he said, are now down to approximately $26,000, $4,000, and $19,000, respectively.
“This is just miscellaneous revenues; we don’t know when those revenues are going to go back up,” said Cullen, noting that property taxes are a much bigger issue.
“The borough bills over $91,000,000 for the schools, county and municipality and, by law, we are required to pay the board of education and county in full,” he said, adding. “Just a 1-percent reduction in collection rates becomes a $910,000 loss to the borough.”
Since March, said the administrator, the borough has remained up-to-date with all county, school, and pension payments, however, numerous cuts have been made throughout the municipality, including the furlough of public works and recreation employees, the elimination of overtime, and a variety of other spending cuts.
“Even with all that it’s not enough to overcome significant revenue losses; we are not in a position to just completely cut our way out of this,” said Cullen.
Additionally, said Cullen, the municipality typically receives state aid reimbursements of $2.7 million a year, but cuts are expected in that area as well.
“There are so many moving parts and unknowns right now,” he said, noting that there has been much discussion at the state level about ‘enabling municipalities to borrow for these revenue shortfalls.’
“That is one of a number of mechanisms that we are evaluating as we work through this unprecedented pandemic,” Cullen said.
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