As another year comes to an end, I wanted to present a fourth status report to share my thoughts for the upcoming year, as well as some of the things we have accomplished in this past few months. Since my last update, we had an election that has significantly changed the makeup of Council for 2018. I look forward to working with Marjorie Fox, Matt Gould and Beth Little in addressing the priorities of our community.
Recently, the City administrator provided some statistics on economic activity in town. Construction value has jumped 49% since 2015, and is up 28% from 2016. The total construction value is approximately $106 Million for 2017. Moreover, in our downtown, new businesses have popped up. Unlike when I ran in 2015, when there were nearly a dozen vacant storefronts, now there are just a few stubborn vacant stores. In part to address this, I have been involved in efforts to change what is permitted by downtown first floor zoning. Through Summit Downtown Inc. and the Planning Board, we have started the process of evaluating where it would be permissible to allow indoor recreational options (e.g., arcades, escape rooms, virtual experiences), tasting rooms and breweries, and instructional schools and studios (e.g., cooking and creative arts), and any restrictions in how they are situated. I expect that by early next year that there will be revisions to first floor zoning in the downtown.
Despite the relatively strong economic conditions in our town and its desirability, starting in 2018, we may see some headwinds. Specifically, as most are aware, the Trump tax bill squarely hits Summit residents as it limits the State and Local Tax (SALT) deduction to $10,000 for both income and property tax deductions. In addition, the tax bill, according to reports, caps mortgage interest deduction to a house value of $750,000 and eliminates interest deduction for new and existing home equity loans. In a recent article, it was pointed out that Moody’s Analytics had determined Union County, NJ, as tied for first place as the county worst hit by the tax bill in the entire nation. They estimated that house values would reduce in excess of 10% in our county. Naturally, we will have to see how this plays out—projections such as these may not turn into reality and individual situations may differ from any potential collective impact. Additionally, a change in Congress could lead to restoration of the full SALT deduction, or a cap at a higher level.
In the meantime, what the federal tax bill does is that it forces us to look even more closely at our budgets. This is something I addressed twice at recent Council meetings. Nonetheless, we must recognize that government operations are circumscribed by, among other things, long-term contracts that have been entered into, community expectations of services, and federal and state statutory mandates. Thus, while I have been a strong advocate of “needs” rather than “wants,” it is also necessary to temper expectations for budget-cutting as to what can be done in the short term. But, we can take steps to reduce long-term costs, such as via our recent approval of consolidating court operations with New Providence, allowing Summit to save $500,000 over the next five years, and nearly $120,000 per year thereafter.
Let me close, however, with not talking about economics and finances. A community is not just people paying taxes, living in the same zip code, or using similar services. Rather, a community is individuals caring for each other. This year has witnessed some terrible tragedies in our little city, with the loss of individuals who contributed a great deal and who touched so many lives. To see how folks have responded is a testament to a place that one can proudly call home.
I expect that we will have an exciting year with a new Council. And, I wish all of you joy and peace in the New Year.
David Naidu, Member - Summit Common Council, Ward 1