Pennington approves 2023 municipal budget with increase in tax rate

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Officials cite out of control factors for increases

Pennington Council is raising municipal taxes by 4-cents to address increases in budget expenses and decreases in revenues for 2023.

Council President Catherine Chandler, and Council members Deborah Gnatt, Charles Marciante, Nadine Stern and John Valenza voted “yes” to adopt the $4.43 million 2023 municipal budget at a Council meeting on April 3.

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Councilwoman Kati Angarone was absent for the meeting.

For 2023, the municipal tax rate is projected to rise from 50 cents to 54 cents per $100 of assessed valuation. The owner of an average home assessed home at $487,000 will pay $2,629 in municipal taxes, a $194 increase from 2022 municipal taxes.

Municipal taxes are one item on a property owner’s total tax bill, which also includes school taxes and Mercer County taxes.

The amount an individual pays in taxes is determined by the assessed value of his home and/or property, and the tax rate that is set by each taxing entity.

“The budget is up about roughly $300,000. Some of that is made up of salary and wages increased by $58,000 and other expenses of $242,000,” said Pennington CFO Sandra Webb.

The $58,000 accounts for the cost of living adjustments for both bargaining unions and non-contractual employees, according to Webb.

The increase in other expenses are due to increases in liability insurance, health benefit costs, pension costs, gasoline, retiree benefits, library expenses, and first aid costs.

“Some of the things that drove this budget are things we can’t control. The insurances we have very limited control over, certainly the pensions, what we provide for Medicare reimbursement for retirees,” Webb said.

She further added, “This year we had a new shared service for the First Aid services. The other thing that increased this budget was the contractual obligation we have with the police bargaining union.”

Pennington’s municipal appropriations are increasing from $4.13 million appropriated in the 2022 budget to $4.43 million for 2023.

In 2023, the tax levy is expected to be $3.05 million, a $229,683 increase from 2022’s $2.82 million that residential and commercial property owners paid in 2022.

Webb noted that some of the items that decreased in this budget in terms of revenues contributed to the tax increase Pennington property owners will face this year.

“The uniform construction code is always a touch and go revenue. We saw that increase a lot during the pandemic,” she said. “We have seen receipts from delinquent taxes is less and had a slight decrease in the American Rescue Plan funding. We are going to use that money for projects in the water and sewer utility.”

On the revenues portion of the 2023 budget, Pennington will use $496,084 from the surplus as revenue in the budget. In the 2022 budget, officials used $492,299 from the surplus funds as revenue in the budget.

Other projected revenues in the 2023 budget include $197,365 in state aid; $82,000 in uniform construction code fees, which is a decrease from $110,00 in 2022; $62,000 in trash collection fees and $57,500 in reserve for liquor licenses.

“We then have these types of revenue increases: surplus, municipal court, we are bringing in a little bit of surplus from water and sewer, which is something we have never done before, but we felt in order to keep the tax rate where it was, we were going to do that; debt service is up a little bit,” Webb said.

Additional revenue increases are $20,000 from library tax, $19,000 for trash stickers, and a $9,800 increase from excess state aid.

On the appropriations side of the budget for 2023, the budget will fund $753,000 in police salaries and wages, which is a $72,000 increase from 2022; $327,000 on municipal debt service; $292,000 in road repairs and maintenance salary and wages; and $255,000 on payment of bond principal.

Gasoline and lubricants increased by $20,000 for a projected expense of $46,000 in 2023, $219,814 is projected to be spent on shared service agreements, and $231,118 on employee group health.

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