The Township Council unanimously introduced a 2012 municipal budget Tuesday that will raise taxes by an average of $78.86 a year if adopted in its current form.
A spate of successful tax appeals and a township-wide loss of assessed valuation contributed to a proposed $100,681,043.31 spending plan that is 1.65 percent larger than the 2011 budget, Administrator Paul Shives said in a press briefing before the Township Council met.
The 2012 budget will be funded in part by a $65,017,507 tax levy that is $3,537,600 greater than the $61,479,907 2011 levy. Residents at the township average assessement of $355,056 would pay $19.72 more a quarter, or $78.86 a year.
Reduced Base, Fixed Costs
Shives said the administration largely kept expenditures flat in the 2012 plan but was challenged by a lack of revenue.
"Our problem was not on the expenditure side, the problem is on the revenue side," Shives said. "That is a direct result of the problem we have with tax appeals."
Since a revaluation of properties in 2009, the township has seen more than 7,000 tax appeals as the housing market soured and residents challenged their valuations. Shives said the township had to reimburse taxpayers more than $2.3 million after the 2011 budget was adopted as a result of successful appeals, which then negatively impacted their ability to formulate the 2012 plan.
More than $600 million in assessed valuation was lost from 2011 to 2012, Shives said, and the township is down almost $1.3 billion in assessed valuation from the 2009 revaluation.
Given the reduced base of valuation, the administration was forced to raise the tax rate before increasing spending in any budgetary line item.
"To raise the same amount of money, the tax rate has to go up. There's no magic. There's only two sides of that equation," Shives said. "If the assessed valuation goes down, the tax rate has to go up to raise the same amount of money."
The 2012 budget employs a .3749 tax rate, a 1.4-cent rise over the 2011 rate of .3613.
However, Shives and Mayor Thomas Kelaher hope to eliminate the ongoing problem by conducting a township-wide reassessment of properties. The Township Council unanimously adopted a resolution Tuesday supporting a tax assessor request to conduct a reassessment.
The mayor and administrator said the township would conduct a reassessment largely in-house, at a cost of around $100,000, rather than contracting with an outside firm. The administration hopes to complete it this year so the property assessments are valid for the 2013 budget process.
"It has to get done. It's absolutely critical," Shives said.
Elsewhere, the administration dealt with rising fixed costs that contributed to budget growth.
For example, the township's health insurance costs went up 14 percent from 2011, or $1.8 million, with $26,837,927 budgeted for insurance and employee benefits alone. Shives said the administration debates the merits of different insurance arrangements annually, but in 2012 it was "still more cost effective to stay where we are."
Toms River also didn't see much help from the state, which kept aid flat at the 2011 amount of $8,492,807.
Stable Services, Employee Concessions
Despite the revenue challenges, Kelaher made clear to the administrator that 2012 was "not the time to be cutting services when people can least afford to pick up the slack."
The proposed budget does retain all programs, services and employees, although the township has lost 37 fulltime jobs from 2008 to 2012 via attrition. Shives said vacant positions will only be backfilled when necessary to avoid a cut in service.
For the second straight year, there will be no increase in salaries and wages.
Kelaher and Shives praised the eight bargaining units in the township, who negotiated with the administration to accept a variety of cost-saving measures the past two years, among them: six unpaid furlough days among the Teamsters and Supervisors' unions; voluntary furloughs for employees in the Clerical union; a new salary scale for employees in the Community Service Officers union; and a reduced salary scale for new members of the PBA.
"Without the collective bargaining units, this (the budget) would not be possible," Shives said.
The mayor said a "culture of trust" has developed between the employee unions and township.
"They understand we're telling the truth. They've all been very receptive," Kelaher said. "If we didn't have cooperation from them, we would have had a serious problem."
All eight contracts will be negotiated when they come up within the next two-plus years, Shives said.
"It's not adversarial," Kelaher said.
The administration also saved money by focusing on reducing overtime costs over the past four years and has lowered the expenditure by 41.5 percent during the time period.
"We're very proud of that fact," the administrator said.
Department spending is down by 10 percent in almost all cases except where it was impossible, such as the legal department, which has dealt with the increased tax appeals.
The 2012 proposed budget also continues existing shared services agreements with other municipalities and entities, such as building inspection services with Brick and trash and recycling collection with Ocean County College. Shives said the search for sensible shared service accords is an ongoing process.
In the current environment, the budget process itself is one that never truly ends either, Shives said.
"A good budget is like a good pool game. You set up for the next shot," he said.
The Toms River Council will hold a public hearing on the budget at 6 p.m. May 1 at .