Thursday, September 14, 2006
By JAN BARRY
RINGWOOD -- After a tongue-lashing by irate taxpayers, the Borough Council has accepted $500,000 in extra state aid and made an additional, state-approved cut in the 2006 municipal budget to lessen its tax impact.
"I hope Jay Leno doesn't hear about this, because we're going to be the laughing stock of the world if we don't accept the money," Chuck Forbes, a local businessman, told the council before the 5-2 vote Tuesday evening.
Former Mayor Ted Taukus rose from the audience to say that Ringwood is already a laughing stock in New Jersey.
"No one has ever heard of a municipality turning down $500,000," Taukus said. "In my 12 years on the council, we applied every year" for the so-called extraordinary aid given to municipalities facing unavoidable budget crunches.
The Borough Council stunned many residents and state officials last month when it voted against accepting the extraordinary aid money that Ringwood had applied for in the spring. It did so on the initial misunderstanding that accepting the money would prevent them from making more municipal budget cuts to ease a tax increase that, with the grant, stood at 6.5 percent.
The council then directed Borough Manager Ken Hetrick to trim the budget by as much as $800,000 for council review. On Tuesday, the majority of the council voted to accept a proposal that borough Auditor Charles Ferraioli worked out with the state Department of Community Affairs. That proposal entailed accepting the $500,000 in tax-relief funds, cutting the budget by $100,000 and using $20,000 in surplus for additional tax relief.
Ferraioli said the financing moves would result in a 4.4 percent tax levy increase. That is one of the lowest tax rate increases in the state this year for municipal budgets, he said. The added cost to the owner of the average Ringwood home: $69. Last year's average tax was $1,532.
In April, the council had introduced a $14.3-million 2006 municipal budget with a projected 15 percent increase in the local tax levy. That would have increased taxes by about $225 for an average home, assessed at $180,000. The $500,000 grant by itself lowered the municipal-purposes tax levy to an increase of about $100 per home on average. But two council members objected to taking the grant money and called for making deeper budget cuts.
"We were forced into an extraordinary aid position," councilwoman Wenke Taule said Tuesday night. She said the council should reject the state grant and slash the budget to achieve a similar tax level to last year's budget, even if that meant layoffs of municipal employees.
"Our budget process is severely screwed up," said councilman Bill O'Hearn. He said the council should have followed through on budget reduction suggestions made earlier this year, instead of waiting to see if the borough would get an extraordinary aid grant.
Ferraioli replied that the council could continue trimming municipal expenses.
"There's nothing to prevent you making cuts tonight - after you adopt the budget," he said. But Ringwood risked not getting extra state aid next year, he said, if the council insists on cutting the 2006 spending plan by more than what state officials approve.
The Department of Community Affairs, which oversees municipal budgets, allows towns that get extraordinary aid grants to make reasonable budget reductions, Community Affairs Commissioner Susan Bass Levin said earlier this month. she emphasized that the agency knows Ringwood is facing a rough fiscal year and would accommodate the borough if a good case was made for reducing itas preliminary spending plan beyond grant guidelines.
Ringwood successfully applied for the extra aid by citing increased legal and engineering expenses related to the cleanup of Ford's former toxic waste dump site in Upper Ringwood, loss of tax revenue from property tax appeals, and its inclusion in the Highlands preservation area, where development is sharply curtailed by the 2004 state Highlands Act.
Besides the state grant, Ringwood won an agreement by insurance companies to pay for legal and engineering bills regarding a federal Environmental Protection Agency order to help pay for the Ford cleanup and lawsuits by residents of that area. Ferraioli said the insurace money can be put into surplus for next year's budget.
The $100,00 cut was made by trimming from various accounts, including $50,000 from police salaries. Hetrick said these areas could be trimmed without affecting services or current staffing.
Taule and O'Hearn argued for making an additional $221,000 in cuts Hetrick listed in response to the council request that he show what it would take to reduce the levy by $800,000. Hetrick included the $500,000 grant in his calculations and provided a page long list of cuts in various areas.
But the council majority decided to approve the proposal that Farraioli worked out with state officials. Councilmembers also made statements indicating they want to start cutting municipal expenses this year with an eye toward the 2007 budget.
"I'll be against applying for extraordinary aid next year," O'Hearn said. "I don't want to go through this again."
Reach Jan Barry at barry@northjersey.com