Council Votes to Introduce 2022 Budget - What Will the 3-Tax Point Increase Cost You?
At the April 19th City Council meeting, the Mayor and Council voted 5 to 1 (Councilman Gibson was absent) to begin the public input phase of the budget process and approved a hearing date of May 17th that is required to formally adopt the annual budget. By law, the formal introduction of a budget is presented to the public for their input, both at the next Council meeting and during the public hearing two meetings from now. Councilwoman Sadrakula was the only no vote to set the public hearing date and present the budget documents for public access.
With this introduction, the entire budget document sent for State review is available to the public. Click here to see the formal budget. There is also a version called the “user-friendly budget” that presents the budget figures in a more easily understood format. Click here to see the user-friendly budget.
The 2022 Budget Challenges
Like most towns in New Jersey, Clifton continues to be negatively impacted by the COVID pandemic for the second year. Revenues from sources other than property taxes such as recreation fees, ambulance fees, and construction permits were well below 2019 pre-pandemic levels. State law only allows municipalities to anticipate revenue in their current year budget equal to the amount of funds collected in the prior year. Based on the lower amounts of user based local revenues, greater pressure is put on property taxes to maintain services.
Also placing a strain on efforts to hold down property taxes are the loss of grant revenue received to address the needs caused by the pandemic. 2020 CARES Act money totaling $4.9M was a one-time revenue in 2020 that helped avoid a large tax hike or a severe reduction in services in 2021. Last year also saw the infusion of $30.5M in American Rescue Plan Act (ARP) funding. The Council in 2021 used $6M of that money along with the CARES money to produce a 0% property tax increase. This year the Council is using $4M of the remaining $11M in ARP money to lower the tax increase.
Administration has cautioned the City Council that ARP money is better used on long term infrastructure projects. As an example, spending ARP funding on storm sewer improvements would address immediate needs such as mitigating flooding without requiring the City to borrow money and pay interest costs in the future.
This illustrates the increase in expenses in each category:
On the expense side of the budget, several lines of statutory and contractual expenses (those the Council can’t cut) are contributing to the increased pressure on property taxes. Union salaries for Police, Fire, DPW, and City Hall employees are all contractually increasing anywhere from 2% to 2.25% and account for roughly a $1.1M increase over the 2021 budget. The City Council has two options regarding contractual salary obligations until they can negotiate a new contract: either increase taxes to maintain services or lay off enough employees to offset the contractual increases and reduce services.
Similarly, the 2022 budget has several statutory increases the City must pay. The largest is the roughly $845,000 in mandated pension contributions billed by the State. Debt service payments for Bond and Notes principal and interest on borrowed money also increased by $316,000. And just like residents, the cost of gasoline, fuel oil, gas and electric are budgeted for approximately $350,000 more than last year. Debt Service, Utilities, and Pensions account for more than a $1.5M increase over 2021 expenses.
The 2022 Budget Goals
The introduced budget approved the following goals:
- Address Police overtime costs by adding 3 Lieutenants and 1 Sergeant in the Police Department. Overtime at the supervisory level has been an ongoing issue since at least 2019 when one Lieutenant nearly doubled the base salary, getting paid $399,000 for the year as reported by NJ.com.
- Add 1 Sergeant and 3 civilians to the Police Department to implement a body camera program that will create more accountability and transparency in Police interactions.
- Add 2 Superintendents of Public Works supervisory positions reporting to the Director of Public Works; one Superintendent for DPW functions and one for the Sewer functions to improve services such as storm sewer cleanouts to mitigate flooding and parks maintenance.
- Fully fund the Health Department to ween the City off the grant money that will no longer be available.
- Additional funding in the Botany Village Special Improvement District to bolster the city’s investment in the oldest downtown in Clifton.
What It All Costs
To pay for the goals in the 2022 budget, the City is using $2.6M more in surplus than it did the year before. The City is also diverting $4.0M in American Rescue Plan Act (ARP) funding from long term infrastructure investments to bridge the revenue gap. Despite $6.6M in alternate funding for the 2022 budget, in order to balance this budget, the City Council has approved increasing property taxes by roughly $2.0M. This is an 1.94% increase over last’s year property taxes, the municipal tax rate is moving from $1.548 per hundred dollars of assessed value to $1.578 which is a $0.03 increase or three tax points.
The user-friendly budget uses the average assessed home to illustrate the tax increase impact. The current year average residential assessment is $179,000. Using the above figures, 2021 property taxes to support the municipal budget were $2,770.92 and it is increasing this year to $2,824.62 resulting in an annual increase of $53.70. Billed quarterly, to achieve their policy goals, the quarterly tax bill will be $13.43 higher than last year or roughly $4.48 a month.
How to Calculate Your Tax Increase - Municipal Tax Calculator
The City sends out a postcard annually in January to inform all property owners of their assessed value. The assessed value and market value of your home are different, the assessed value is significantly lower than what a Zillow search would turn up. If you cannot find your Notice of Property Assessment for 2022, you can use the City’s website to look up your property’s assessed value. Click here to look up your assessed value.
Enter the assessed value of your home (a Zillow figure will produce incorrect results) into this MUNICIPAL TAX CALCULATOR to see exactly what the three-cent tax increase (per hundred dollars of assessed value) will mean for your home. (Download The Google Sheets App to use the calculator on a mobile device, or use on a desktop).
The graph below illustrates what portion of your taxes are for municipal services. The calculator is designed for the 28.5% municipal portion of property taxes only.
The Mayor and all the Council Members voted to begin the public input part of the budget process, with the exception of Councilwoman Sadrakula. The Clifton Times contacted Councilman Gibson who indicated that had he been able to attend the April 19th Council meeting, he would have voted yes to hear from the public.
Because the budget can be amended prior to its adoption, the public has two opportunities to voice their concerns, support, or suggestions for budget cuts for the introduced budget.
Read more about the Clifton City budget here:
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