Montgomery Township not immune to increases in inflation and costs
Montgomery Township property owners will experience a slight tax rate increase with the introduction of the $35.1 million municipal budget to fund township operations for 2023.
The municipal budget was introduced to the Township Committee and public on April 6.
A public hearing to determine whether to adopt the budget is scheduled for May 4.
The introduced budget’s projected tax rate for property owners is 45.4 cents per $100 of assessed valuation, which is a 1.7-cent increase from 2022.
An owner of an average assessed home at $506,228 will pay $2,298 in municipal taxes.
Municipal taxes are one item on a property owner’s total tax bill, which also includes Montgomery Township School District taxes and Somerset County taxes.
The amount an individual pays in taxes is determined by the assessed value of his or her home and/or property, and the tax rate that is set by each taxing entity.
“If you look at the past couple of years our tax rate has increased slightly,” CFO Michael Pitts said. “We tried to especially in 2021 and 2022, take the burden off the residents during the COVID-19 pandemic. In 2021, we only increased it by 1 percent, in 2022 by 1.74 percent and combined with this increase the average increase over the three years is 2.23 percent.”
The $35.1 million budget for 2023 has increased by $5.2 million from the previous year’s municipal budget of about $30 million.
“That $35 million looks like a large jump from $29.9 million [2022], but that is because we have $5 million worth of grants compared to last year,” Pitts added.
Residential and commercial property owners support the appropriations through a tax levy, which totals $18.2 million.
“Everybody knows that inflation has been up, everybody knows costs are up. It was no different for us,” Pitts said.
Major cost increases for this year include: $847,000 in annual debt related to 2022 bond for capital for 2017-20, $300,000 reserve in uncollected taxes, $245,000 in police contractual salaries, $134,000 in statutory police pension costs, and $47,000 in vehicle maintenance, according to a budget presentation from Pitts.
For revenues in the 2023 budget, Montgomery will use $4.1 million from the surplus as revenue in the budget.
Other revenues include: $5 million in grants, $1.46 million in state aid, which increased by more than $81,000 from the amount of aid received in 2022, $1.2 million in American Rescue Plan funding, $1.1 million from uniform construction code fees, $820,000 from receipts from delinquent taxes, $642,478 from fees and permits, and $191,287 from shared service agreements.
On the appropriations side, the budget will fund appropriations that include $5.5 million on municipal debt service.
Additional appropriations include $3.8 million for the police department, $3 million towards insurance, $1.7 million towards road repair and maintenance, $1.6 million on utilities, $1.46 million to reserve for uncollected taxes, $1.2 million for police and fireman’s retirement system of New Jersey, $350,000 for legal services, $196,000 towards shared service agreements and $163,170 towards capital improvements.
“Ninety percent of our budget is related to salary, debt, utilities, liability, benefits and our social security taxes. So, there is not a lot of room to work with here,” Pitts said.
