HILLSDALE—The Borough Council introduced a $16.5 million budget on April 5, with an approximate 1% increase, or $96,876, that will nudge local homeowner taxes by $27 annually.
However, Borough Finance Committee Chair Abby Lundy also pointed out that municipal taxes comprise 20% of a homeowner’s annual tax bill, with school taxes (70%) and county taxes (about 10%) making up the difference.
No specific plans to bond for a future community center were included in the proposed budget. A budget public hearing is scheduled for Tuesday, May 3.
“Financially we’re in great shape,” said Lundy, after a short budget presentation. Residents can access the draft budget and budget presentation via highlighted links on the online April 4 Borough Council agenda.
Lundy said the $16,511,696.62 plan represented stagnant state aid for 11 consecutive years; $1.1 million in pandemic-related aid via the federal American Rescue Plan; FEMA grant funds for Hurricane Ida impacts; recycling and clean communities grants; and fund balances from prior year operations.
A percentage breakdown of the $16.5 million budget shows 20% to public safety; 15% to DPW; 11% for insurance; 8% for pensions; 7% for BCUA and recycling; and 15% for “other” expenses such as uncollected taxes, code enforcement, public health, volunteer service stipends, Planning Board and shared services.
Mayor John Ruocco said he would have preferred a flat budget by paying off the $97,000 increase with funds from the surplus account, currently at about $4.3 million. He criticized the 1% increase as “still tax and spend.” [Correction, April 11: Our print version of this story gave a significantly incorrect amount for the estimated surplus. We apologize for the error. See below for Mayor Ruocco’s letter on the subject.]
However, chief financial officer Sheryl Luna, who worked closely with the finance committee and Business Administrator David Troast to prepare the draft budget, called it “a solid budget” that contained “no fluff” and met the needs of residents.
She said that she, like other CFOs, was not a fan of zero-percent increase budgets, noting the budget can always be revisited and that the increase was “technically less than 1 percent.” She noted the state mandates local library budgets, and minus that increase, it would be below 1%.
Last year, the council voted to increase municipal taxes by 5.33% by including nearly $500,000 for a future bond down payment on a community center and new turf field. So far, no decisions have been made on either initiative after a consultant estimated their combined cost at $16 million.
Some capital appropriations include Beechwood Park matching grant funds; a pickup truck for DPW; Office of Emergency Management radio and technology upgrades; a Fire Department Scott Pack air filler machine; new flashing pedestrian crossing and stop signs; a new police vehicle; and a “significant” road resurfacing program.
Under a recap of municipal debt, with current interest rates low, Lundy said the committee recommended “going to bond for some capital improvements” including a Maple Avenue Park retaining wall, a Fire Department rescue boat, and “significant improvements/turfing at Centennial Field Complex.”
“The borough has very little debt because we have historically utilized a cash capital improvement program. The borough paid down its previously issued debt in 2021 by making a $485,000 bond principal payment,” said Lundy.
Editor’s note: Mayor John Ruocco wrote to Pascack Press on April 10 with this correction and context on the budget:
Gentlemen, the article on page 13 of your April 11 edition titled “Proposed $16.5 million budget includes 1% annual increase” has a significant error. The article alludes to the Borough’s surplus account as being $414,000, and cites that as the reason why I preferred to eliminate the $97,000 tax increase being proposed in the budget. But the surplus that Hillsdale has going into 2022 is more than 10 times that amount, or $4.3 million.[1] Here is what I said during the Council meeting on this point:
- I am relieved that we are not proposing another tax increase of last year’s 5.3% magnitude. But the 1% municipal tax increase being proposed (1.2% if you include the library) is unnecessary, given the $414,000 increase in our surplus account from last year to this year. Surplus was generated last year, as it typically is every year, because we didn’t spend what was appropriated in last year’s budget. Typically, a prudent portion of that surplus is then counted on to serve as revenue in the next year’s budget, alleviating the need to tax or borrow. The proposed budget calls for a drawdown from surplus to help fund appropriations, and the drawdown is $1.5 MM. That is $463,000 less than last year. If we drew it down by another $97,000, we could eliminate the tax increase to residents. We could do this and still go into 2022 with $4.2MM in unused available surplus. That would be $314,000 more than what we had last year at this time.
That is the primary reason for questioning any tax increase this year, albeit belatedly because I was excluded from most deliberations of the Finance Committee due to changes in the bylaws made by the Council majority to exclude me from committee discussions. There is no financially demanding crisis on the horizon, and if one develops, the Borough could always do a special emergency appropriation or, as is more likely, seek debt financing if the project was of a capital nature. That is exactly what will happen if the Council moves ahead with strengthening the DPW compound against flooding, turfing Centennial Field, and building a community center. The increased debt servicing requirements will be addressed by the significantly increased revenues from redevelopment in the industrial zone (not to mention the additional increased revenues that we would get if the Council implements a strategy of declaring the core downtown business district as an area in need of rehabilitation!)
Why does the Council want to participate in the estimated $309 property tax increase (2.2%) about to hit the average Hillsdale homeowner from municipal, school and county authorities? Isn’t it difficult enough that Washington and Trenton are showing no restraint on taxing residents, taxpayers are still suffering from the elimination of the SALT deduction, and soon they will be asked to pay a significant amount to fund the construction of a new George White school?
Residents should also ask why a tax increase is necessary when last year’s budget raised municipal property taxes by 5.3% for the sole purpose of putting $500,000 into the Capital Improvement Fund to be a down payment for building a community center and installing artificial turf at Centennial Field. That money was never spent. Where is it in the 2022 budget? Or did it get absorbed funding the myriad of other general operating expenses in the 2022 budget? Maybe that’s why this year’s budget could reduce its reliance on surplus as a revenue source by the $463,000 mentioned above.
[1] See Municipal Data Sheet “A” in the 2022 Budget.