Secaucus expects minor tax increase

Follows eight years of flat budgets

Secaucus Council introduces a budget with a slight tax increase.
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Secaucus Council introduces a budget with a slight tax increase.

Taxes are expected to rise moderately as a result of the $60 million municipal budget introduced by the town council on April 23.

This is the first increase in taxes after eight years of flat budgets, said Mayor Michael Gonnelli, who reported that the council worked hard to try to keep this budget flat as well.

“In the past, we were able to make up for increases in expenses without raising taxes,” Gonnelli said. “But this year, we could not.”

In the past the town has applied surplus funds to help keep municipal taxes low to balance out any increases in school or county taxes. If those figures are also low, the town can save surplus money.

Gonnelli called the tax increase “small,” and said it was the result of expenses that could not be covered any other way.

“This is nothing to lose sleep over,” he said.

The increase will be less than $100 on an average home assessed at $175,000, Gonnelli said.

This is only the municipal portion of the total tax bill. The county budget has not yet been struck, although county officials said the highest increase will be paid for by Jersey City this year.

The school budget has also not been finalized.

Residents pay overall taxes that are made up of county taxes, municipal taxes, and school taxes.

Good faith effort

Councilman Robert Constantino said the council worked hard to try to keep down costs, but that in the end the increase in taxes was necessary.

“We’re going to continue to work on it before we finally adopt it,” he said. “But it is important that we look to avoid impacts on future budgets. So we need to absorb costs this year.”

Gonnelli said this year’s budget was impacted by increased health insurance costs that went up by about $500,000 and a rise in contractual obligations such as salaries that rose by more than $6 million.

The town also has to pay back more than $1 million as a result of tax appeals from some of the larger corporations.

This year’s budget was also impacted by a lower tax collection rate than in the previous year. As a result, the town has to set aside a larger amount in the upcoming budget.

The council, however, passed a resolution that would apply an average collection rate from the last three years to this year’s budget to help offset the state requirement of a larger reserve for uncollected taxes.

The resolution said that using last year’s figure would pose an unfair tax burden on taxpayers.

Tax collection for 2018 was 98.19 percent, down from 99.53 percent in 2017. But by averaging the last three years, the council would set aside a reserve based on 99.04 percent.

The council also introduced an ordinance that would allow the 2019 budget to exceed municipal budget appropriation limits and to establish a cap bank.

This is governed by the 1977 budget cap law which limits appropriation increases, and requires the town to pass an ordinance applying for a cap waiver from the state Division of Local Government Services.

Under state law, a municipal budget is normally limited to a 2.5 percent increase over the previous year’s budget.

The town ordinance would seek permission to increase this year’s budget by 4.5 percent.

This amounts to a $449,193 increase over the permitted increase, or a total increase in the 2019 budget by $1,572,178 above the 2018 municipal budget.

Two ordinances introduced

The council also voted to introduce two bonding ordinances.

The first is a $6.5 million bond ordinance that would authorize making various public improvements and the purchase of additional or replacement equipment and machinery. Some of these include new technology and telecommunications equipment and new vehicles.

From this bond, $2.4 million would be used to fund the resurfacing of various Secaucus roads.

The town will also purchase a former county facility on Millridge Road which has most recently been used by the Board of Education at $1.8 million. Gonnelli said this would be reimbursed by the school district in the future.

Other purchases included computers for various town departments, new police vehicles, vehicles for the Department of Public Works, and medical transport vehicles.

Some of the bond will be used for the town’s fire department marine division, storm water mitigation improvements, and improvements to the recreation center.

The town will also construct a new library annex in the X-Change section of southern Secaucus at a cost of about $300,000.

In some cases, the bond will cover the cost of down payments on projects or on purchases that may take a number of years to repay, officials said.

The council introduced a second bond ordinance for $82,000 to cover the cost of improvements to the municipal pool complex.

For updates on this and other stories check hudsonreporter.com and follow us on Twitter @hudson_reporter. Al Sullivan can be reached at asullivan@hudsonreporter.com