Of the 51 municipalities in the state of New Jersey operating on a fiscal year (July 1st – June 30th), only seven have already passed their budgets as of last week; the others are awaiting a decision on the pension deferral legislation and extraordinary aid. The reason most, if not all, the other 44 municipalities have not adopted their budgets is because they all have levy cap problems, and municipalities with levy cap problems have to apply to the Local Finance Board (LFB) for a waiver. If a waiver is not granted, municipalities would have to reduce their budgets by the amount by which the budget exceeds the levy cap. In the case of Plainfield, that number is just over $3 million. Currently, the LFB will not hear any applications for waivers until a decision is made on the pension deferral legislation and on extraordinary aid.
Mayor Sharon Robinson-Briggs has been urging the council to accept the 50% pension deferral, suggesting that this is the only feasible way to ease the property tax burden on our residents. This "urging" is misplaced, however, because based on the way the legislation is currently written, municipalities will not have a choice to defer or not to defer--deferral will be mandatory.
Mayor Sharon Robinson-Briggs has been urging the council to accept the 50% pension deferral, suggesting that this is the only feasible way to ease the property tax burden on our residents. This "urging" is misplaced, however, because based on the way the legislation is currently written, municipalities will not have a choice to defer or not to defer--deferral will be mandatory.
A 50% deferral for Plainfield will equate to $2.7 million, leaving Plainfield with a need for approximately $300,000 to get below the levy cap and avoid the need to go before the LFB for a waiver. It is likely that Plainfield will receive extraordinary aid to the tune of at least $300,000.
So, as it stands, Plainfield and other municipalities are between a rock and a hard place: they are over the levy cap and they need a waiver from the LFB. They can’t get a hearing for a waiver from the LFB because of the pending pension deferral legislation and a decision on extraordinary aid. Therefore, Plainfield cannot adopt its budget in its present form; the budget would have to be cut by a minimum of the amount by which it exceeds the levy cap, which is just over $3 million.
Between a rock and a hard place is not a good place to be, especially in these harsh economic times. However, tough times call for tough decisions and tough love.
So, as it stands, Plainfield and other municipalities are between a rock and a hard place: they are over the levy cap and they need a waiver from the LFB. They can’t get a hearing for a waiver from the LFB because of the pending pension deferral legislation and a decision on extraordinary aid. Therefore, Plainfield cannot adopt its budget in its present form; the budget would have to be cut by a minimum of the amount by which it exceeds the levy cap, which is just over $3 million.
Between a rock and a hard place is not a good place to be, especially in these harsh economic times. However, tough times call for tough decisions and tough love.
It’s time for the mayor and council to make the tough decisions.
Regards,
Adrian
Regards,
Adrian
Thanks Adrian for sharing this information. Who would have thought that there are 24 other municipalities that have not passed their budget? Your post makes the picture a bit larger when it comes to Budgets and the Fiscal Year.
ReplyDeleteWould the council ever consider kissing good bye to the Fiscal Year Budget and embracing what the other hundreds of municipalities embrace?
Thanks!
Maria Pellum
Maria:
ReplyDeleteAccording to the NJ statute,N.J.S.A. 40A:4-3.1,“any municipality operating under the State fiscal year as of January 1, 1997 shall continue to operate under the State fiscal year.”
Regards,
Adrian
What specific cuts do you recommend in these harsh economic times? BTW speaking of the PMUA, how do you propose the city repay long-outstanding bonds already owed by the PMUA if the City merges these services with the City
ReplyDelete