Saturday, February 21, 2009

The Budget Again

Thank you Councilor Mapp for your lucid explanation why Plainfield and 43 other communities have not been able to adopt a budget. You have let the Mayor and City Administrator off the hook.

I am not clear about the "cap", I know it is a 4% on the local property tax. Was there not also a 2% cap in existence and is the 4% on top of the earlier cap or has it expired. Is it not true that the levy cap does not apply to the County and BOE portions of the tax bill? If true our tax bill might rise 5% or more.

An other question that has not been answered is the impact on the 1.6 million dollar error in the submitted proposed budget on the 3 million shortfall. That would be Administrations accountability.

I hope the State does not mandate the 50% underfunding of pension plans. Personally I would benefit by a smaller tax bill today, and having the knowledge that the likely hood of not being around when it will be time to "Pay the Piper" will not cost me in the long run.

This state like others apparently is going to make wages adjustments and work furloughs mandatory despite union pressure. Talks with the local employees to come to an amicable solution should be on going. Every where it is becoming an acceptance with a" do more with less" policy or layoffs. The Council must focus on that choice and hope the unions are good citizens.

amended 9:30AM

3 comments:

  1. Mapp is going or already has recommended the deferment at his day job in Roselle - a city that last year had a 7% increase. Thus his laying the foundation for a "yes" vote in Plainfield.

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  2. Doc:

    I didn’t catch up on reading blog comments until today so I apologize for not getting back to you sooner. The answers to your questions are as follow: There are two CAPS, the appropriations CAP and the levy CAP; 1) the appropriations CAP is currently 2.5%, this is the amount by which municipalities must limit the current year’s appropriation over the previous year’s final appropriations, subject to certain exceptions.; 2) the levy CAP is currently 4%, it is the maximum amount by which the tax levy can increase one year over the next subject to certain exceptions. Municipalities whose levy exceeds 4% must apply to the Local Finance Board for waivers.

    The County government and the BOE must also comply with the requirements of the levy CAP law but independent of the municipal budget. The County and BOE simply provide the municipality with the amounts that must be collected on their behalf and the municipality must remit 100% to those two entities.

    As for the $1.7 million error, the Administration had proposed reducing the reserve for uncollected taxes in order to offset this error. The reserve for uncollected taxes is a non-spending appropriation that municipalities are allowed to put into the budget to ensure that enough money is collected from tax payers to cover all obligations; it assumes that some people won’t pay their taxes, it is formula driven and is based on the previous year’s collection rate or the average of the last 3 years. I will be reviewing this proposed solution very closely.

    Finally, there have been comments in the past suggesting that it would make sense for the city to go back to a calendar year. However, according to the statute, “any municipality operating under the State fiscal year as of January 1, 1997 shall continue to operate under the State fiscal year.” I hope this information addresses the questions you raised.

    Regards,
    Adrian

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  3. Thank you Adrian. I hope his will help others understand some of our budget problems. Sometimes the state gives and often the state takes away.

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