Average Tax Payment Down in Toms River's 2013 Municipal Budget

Despite Superstorm Sandy's impact, many Toms River property owners should expect to pay less in taxes under the township's 2013 budget.

The Township Council by a unanimous vote approved the $116 million budget that, officials said, was designed to combat a potential spike in property taxes caused by the storm. The budget—which will see a final, amended approval to add more funding next week—addresses Sandy’s impact with significant federal and state money.

Property owners at the average assessed residential valuation for 2013 of $234,597 will pay $1,245 in municipal taxes under the 2013 budget. That is a decrease from the 2012 payment of $1,413 for the average assessed valuation of $354,998, according to township Business Administrator Paul Shives.

But, Shives noted, the reassessment will impact each property’s taxes differently, as the tax rate itself increased from 2012 to 2013.

“The assessments vary due to the reassessments. Not everybody will see that savings,” he said.

Property owners can apply the 2012 tax rate of .3981 per $100 of assessed valuation to their assessment that year and compare that to the .5309 tax rate per $100 of assessed valuation to their 2013 assessment to find the difference, Shives said.

Without the FEMA and state emergency funding to offset Toms River’s dramatic ratable base drop, the average tax payment would have been $1,559, according to Shives.

Officials said that the 2013 budget presented challenges because of Sandy’s impact to Toms River. Sandy, coupled with a reassessment that began before the storm hit, meant a $4 billion decrease in Toms River’s ratable base from 2012—it now stands at $11.36 billion. Since 2009, the base has dropped more than $6.2 billion, according to officials.

“For 80 percent of the people in Toms River, the storm was over when their power went back on,” Shives said. “There was no question we could diminish the level of service.”

Since officials didn’t want to reduce essential township services to make up the difference, several funding sources were used.

The township secured a $5 million FEMA Community Disaster Loan, $15.5 million in state Community Disaster Block Grant funding, and is expecting FEMA reimbursements of more than $7 million for storm-related costs, according to Shives.

“The singular focus in our preparation of the 2013 budget has been the continuation of a high level of service to our residents in spite of the monumental challenges we face in the continuing recovery after Superstorm Sandy,” Mayor Thomas Kelaher said in a statement.

Because of an additional $6.266 million in CDBG Essential Services funding that was not approved before the budget hearing Tuesday, a public hearing on an amendment appropriating that money will be held on July 9, 6 p.m. in town hall, before the amended budget is adopted.

Council President George Wittmann said that, between the school district and township, Toms River received $39 million in funding from federal and state sources.

“This will give us some breathing room to help us rebuild the township,” he said. “So, hats off to [Shives].”

“This has put the road to fiscal responsibility and on a path so we can weather this storm,” said council Vice President Maria Maruca.

Bigger budget but smaller tax levy in 2013

The tax levy in the 2013 introduced budget is $4.329 million less than in 2012, according to the township. The amount to be raised by taxation is $60,688,644, down from $65,017,507 in 2012.

“That’s significantly less than last year. Our levy is going down,” Shives said. 

This year’s $116,522,964 budget is $15.85 million larger than the township’s 2012 spending plan.

Salary and wage line items are up 2.9 percent—or $1.687 million—and include all contractual wage increases and the $877,355 cost necessary to fill a total of 10 police patrolman positions open due to retirements, Shives said.

Deferred charges for emergency Sandy recovery operations make up $9 million increase of the increase and a “substantial” increase in the uncollected taxes reserve was included in the budget, according to Shives.

Kelaher said that the township's essential services have increased since the storm—police staff a substation in Ortley Beach and monitor the barrier island constantly, and Public Works employees continue to work to clean and repair storm damage.

Residents will see an additional reduction on their school tax payment thanks to a $12.5 million New Jersey Department of Community Affairs appropriation that was recently awarded. That lowers the school district’s tax levy from $130 million to $117.7 million.

Ocean County’s tax levy should also see a decrease, as it was awarded $7 million in CDBD funding, according to Shives.

Public reaction to the budget

Paul Brush, a Democratic candidate for a council seat, asked about the recent announcement that FEMA funding for Sandy recovery has increased from 75 to 90 percent and its affect on the budget.

The increase doesn't have an impact on the budget right now, but Shives said it will allow the township to pay off the emergency funding it received earlier than planned. The township has five years to pay off its emergency notes, he said.

Resident Dennis Galante, who has continually questioned township and school officials about how they planned to combat Toms River’s drop in ratables, said that he appreciated the effort that went into the budget.

“First I’ll give you credit, especially Mr. Shives. I can’t imagine how tedious it was creating the budget,” he said.

Galante also asked about the township’s recently downgraded credit rating from Moody’s Investors Services.

“It’s like getting an A+ versus an A in school,” Wittmann said. “It’s not going to significantly impact us. We’re talking a fraction of a cent.”

The S&P Ratings Service did not change Toms River’s credit status, according to Shives, and the Moody’s downgrade was widespread locally because of Sandy.

“It was every shore town affected by Sandy,” he said.

Budgeting going forward

While the township is utilizing substantial outside funding in its 2013 budget, Shives said that going forward the ratable base is expected to recover, making those sources—some of which may no longer be available next year—less critical.

As property owners rebuild from the Sandy, the township’s ratable base could see a $1 billion recovery next year. The township will have a surplus to use, and Shives said he has received indication that the state will continue to help municipalities fill budget holes.