HILLSDALE—Following a nearly hourlong discussion May 3 between the mayor and council over whether to increase municipal taxes by about 1%, the Borough Council approved, 5-1, a $16.5 million municipal budget that increases taxes 1.2%.
The spending plan costs approximately $3 more monthly, or $35 annually, on an average home, over the current year.
Mayor John Ruocco pressed to use surplus funds to pay down a $97,000 increase in expenses to avoid any municipal tax increase; however most council members preferred to pay for the slight bump in appropriations by increasing local taxes by slightly over 1%.
The total municipal budget is $16,511,696.62, with a total local tax levy of $10,761,258.53.
However, Ruocco noted that the state-mandated library tax of $655,890 is included in the municipal tax levy of $10.7 million, which means the average homeowner will pay an extra $35 yearly.
Excluding the library tax, the increase would be up only one percent annually, or $27, said Ruocco. The average assessed home in Hillsdale is $468,049.
Ruocco said preliminary tax jump estimates from the school districts (local and regional) and Bergen County for 2022 total about 2.2%, or $309 for an average assessed household. He said he did not believe the council needed to tax property owners an additional one percent levy.
Opposing the tax increase was Councilman Zoltán Horváth. Approving the budget were Council President Janetta Trochimiuk, councilwoman Abby Lundy, and councilmen Anthony DeRosa, Frank Pizzella, and John Escobar.
Ruocco, who votes only in case of a council tie, offered a detailed explanation of why he opposed increasing taxes on homeowners even by $27 yearly, especially given that the $97,000 budget bump could have easily been covered by a surplus account that showed about $2.7 million heading into the 2022 budget year.
Ruocco presented council a chart, not broadcast on Zoom, showing large surpluses over the past eight years. He said the surplus account budget “exceeds anything we’ve had in the last 10 years” and argued against any new municipal tax burden on homeowners.
“The council majority has now made its decision. Hillsdale residents will have to needlessly fork out an extra $27 to go with tax increases that other federal, state, local and school taxing authorities are about to hit them with in 2022 and beyond,” Ruocco emailed Pascack Press.
Before the vote, he said, “Why do we need to tax residents when just emerging from a pandemic, [who] have a looming recession and thanks to Washington and Trenton, we have record inflation. It’s almost as if we don’t care what happens to our residents. It’s an unnecessary tax.”
Most council members said they believed Ruocco was mischaracterizing the 1.2% municipal increase and they stressed that just because the local surplus fund was $2.7 million entering 2022, that it was still important not to rely on it to pay down a tax increase.
Moreover, they noted that the funds could help if tax revenues slow down or unanticipated expenses arise.
Ruocco told Pascack Press May 4, “Yes it’s 1%, it doesn’t sound like a lot, but it is. We’ve had a whopper tax increase of 5.3% last year, in anticipation of building a community center and turfing a field.”
He said the community center was tabled “because we found how expensive it would be” and the proposed $3.5 million field renovation project proceeds.
He noted that should a 2023 referendum to replace George G. White Middle School pass, the average homeowner could pay an additional $1,300 per year for 30 years.
For more on that, see “George G. White estimates in: Options to $82.5M for a new middle school; parent forums set,” Pascack Press, April 18, 2022. A BOE decision on whether to renovate or replace the middle school is likely at the June 13 meeting.
Ruocco also noted should the Claremont-March redevelopment plan come to fruition it might provide “significantly increased tax revenues” to Hillsdale within several years, after construction and occupancy occurs.
The redevelopment plan proposed a 250-unit luxury apartment building for a 5.4-acre site formerly occupied by Waste Management in the Patterson Street redevelopment zone. The plan has not yet come before the Planning or Zoning Board.
He said he believed the 1% tax increase should be thought about “more carefully” and preferred not to “rush to adopt the budget tonight.”
Councilwoman Abby Lundy said she saw “nothing wrong with this budget” and said “I will continue to support it.”
She said Ruocco “was counting the money before we even have it” from any new redevelopment property.
She said most finance professionals had no issues with a minor municipal budget increase yearly as it helps the surplus reserve and for unexpected expenses.
Councilman Anthony DeRosa said Hillsdale did not raise municipal taxes in 2020 and disagreed with Ruocco’s charge that the council members, except for Horvath, were just trying to get taxpayers used to annual tax increases. “It’s so erroneous to say that it’s to get taxpayers used to it.”
Council President Janetta Trochimiuk said the surplus was a “savings account” but Ruocco disagreed calling it a “liquidation account,” adding it’s “there to plug the hole in revenues.”
Trochimiuk said reserve funds might be used to help move or upgrade the Department of Public Works facilities, which suffered flood losses during post-Ida flooding, or for a senior center that may not be on the table now but in the future. She said the reserve should be there to help residents get what they want to get.
“We argue about peanuts all day long and there’s all these things that need to get done,” Trochimiuk said. “But we need to tax so we have a bucket of money to move forward on for the benefit of Hillsdale in the savings account.”
Business Administrator David Troast, who said he has worked since 1990 for municipalities, said the borough should have two to three years of surplus “banked” to prevent any unexpected large tax increases. Troast said the economy made him “nervous. It may be heading for recession and double-digit inflation too.”
Troast advised maintaining two to three years of untouched surplus, noting three prior consecutive “tough years” of 2008–2010 which were unanticipated and stretched many municipal budgets due to an economic downturn.
Addressing council members before the budget’s adoption, Ruocco said, “On April 5, I heard some views around the dais that there is something unsafe or unsound in not increasing property taxes annually. But I didn’t hear any concrete reasons for that except that it would prepare us for the future, — in other words, it builds up our surplus for the rainy day, when there might be an unanticipated need for a large appropriation.”
He said, “But as you can see, our surplus account is strong and growing, and likely to continue to grow (unless anyone here knows differently, and I hope by now that if such a threat exists, I would have been apprised of it.”
He added, “Any philosophy among elected officials and Borough employees that we must acclimate our residents to annual property tax increases, no matter how small, when they are not needed is wrong. It feeds a tax and spend mentality that is a cancer in government. It’s financial lard.”