Verona’s Town Council chamber is not a kabuki theater, but given the stylized drama that unfolded as the 2013 budget was introduced last night it might as well have been.
The major lines of the budget have been known for weeks, spelled out in budget workshops and in a print document available to all for $12 from Town Hall. (If we were in Montclair, we could simply view the town budget for free over its Web site.) As introduced last night, the 2013 budget comes in at $21.3 million, the tax levy portion of which is $15.2 million.
That budget, as it stands now, is up 2.5% from last year. Township Manager Joe Martin again repeated that the budget would have been flat had it not been for Hurricane Sandy. We did have the storm, however, and still haven’t gotten our full reimbursement from FEMA for that or the 2011 Halloween snowstorm.
But those numbers wouldn’t tell you much without several other pieces of information, one of which was finally disclosed last night: The state of Verona’s ratables, which are dismal. According to tax assessor George Librizzi, they fell by another $50 million last year. “I believe clearly that we have hit bottom,” he said.
Librizzi’s comments brought us closer to the bottom line of the budget’s implications for our wallets, but not all the way there. With plummeting ratables in recent years, Verona’s tax rates have risen: Even though the budget was flat last year, the 2012 tax rate was 7.20, up from 6.94 for 2011. Neither Librizzi nor Martin disclosed the tax rate for 2013, but Librizzi did say that the average homeowner would pay $60 more in taxes this year. It takes, however, a lot less to be an “average” homeowner in Verona this year. Our average assessed value now stands at $360,200, down from $371,200 last year.
Librizzi didn’t stay for questions, but Council members had a lot of them, beginning with the obvious: Why are we looking at a 2.5% increase at all?
Councilman Jay Sniatkowski noted that if Verona were to adopt a budget with a 1.5% increase, the municipal hit would be closer to $33. If the budget is flat, we might get to keep a few dollars. (The public school budget approved last week adds $136 annually to household costs here.) In short order, all the members of the Council were asking Martin and finance officer Dee Trimmer to come back with at least a flat budget. “I don’t see why we can’t get down to no increase in the budget,” Council member Bob Manley said. Martin agreed to present alternatives at the next meeting, which is also supposed to bring details of how the debt on the two proposed Hilltop sports fields will be handled. “If that is your decision, we will do it and show you the implications,” Martin said.
Martin had opened the meeting with what were clearly intended to be the implications: That Verona would have trouble funding its retiree health costs. Verona now has 45 retired employees receiving health benefits, 26 of whom are former police officers. The cost of these benefits has risen from $350,000 in 2008 to $784,000 for 2013 and, Martin said, the cost will go higher in the future. “In the future we will have more retirees than current officers, and as a debt obligation it [retiree health] must go to the front of the queue.” he said. The town manager also said that he expected the federal Affordable Care Act to raise the cost of health coverage for current employees.
Council members Kevin Ryan and Michael Nochimson also were uneasy with Verona’s indebtedness. Nochimson took issue in particular with the fact that $8 million of Verona’s debt is being carried as notes, instead of as long-term debt. As a note, the town is only paying interest, and not principal, and the full cost of the borrowing is not reflected in the town budget. Nochimson likened it to a teaser rate on a credit card, which did not sit well with Martin.
“Rates are at historical lows,” Nochimson said after the meeting. “Do we want to to role the dice and hope that rates move lower? We should lock in the low rates now and begin to properly account for our true long-term debt expense today.”
Photo by sfbaywalk via Flickr.
Wow! We are only paying the interest on 8 million $’s debt and no principle? Isn’t that how so many people got in trouble w/ their mortgages when the housing market blew up? I thought Martin was supposed to be the smart guy in the room. Guess not, since he wants to spend money on a street cleaner instead of figuring out how to put our budget on line so we don’t have to pay $12 to get the printed version. Can you say milking the taxpayer?
Kudos to the council for trying to help out thetaxpayers