Township Manager Presents Proposed 2012 Budget, Recommends Referendum to Exceed Tax Increase Cap

If voters do not approve an increase above the state cap Lawrence Township would still need to raise the tax rate by 5 cents and use 97 percent of its available surplus – or $4.8 million – as revenue during 2012, leaving the surplus fund dangerously low.

The news was not good.

Members of Lawrence Township Council sat grim-faced at their meeting last night (Jan. 17) as they listened to Township Manager Richard Krawczun offer his recommendations for the 2012 municipal budget and explain the difficult financial decisions the township faces.

In short, in order to raise the $42.35 million needed to fund township operations and services during 2012 and still comply with the state’s 2 percent tax increase cap, the municipal tax rate would need to be increased by 5 cents and 97 percent of the township’s available cash surplus – or $4,870,000 – would need to be used as revenue for the year, Krawczun said.

The problem, according to the township manager, is that doing so would leave only $154,000 left in the surplus fund and pose even more significant financial problems for the township budget in 2013 and beyond.

As such, Krawczun recommended to council that a public referendum be held asking township voters to approve a tax rate increase above the state’s 2 percent cap. More money raised through taxation would allow the township to use a smaller amount of surplus as revenue in 2012 and, in turn, maintain a larger balance in the surplus fund for future needs.

Such a referendum – if approved by council – would be held in conjunction with the annual school district election and school budget vote in April.

Krawczun last night said it was too early to tell how much of an increase to the municipal tax rate would be needed in order to not reduce the surplus balance to a dangerously low level, but he promised to have that information at the next council meeting on Feb. 7.

“At the next meeting, I’ll have objective data that will show people what happens if you approve the referendum and what happens if you don’t approve the referendum. It will be that straightforward,” he told reporters after last night’s meeting. “I want everybody to understand why and what the choices are between a ‘yes’ vote and a ‘no’ note. I think it’s very important for everyone to hold their opinion until they get all the information.” 

(A copy of Krawczun's 2012 written budget recommendations can by found in PDF format from the media box above, along with other Lawrence Township tax and budget documents from years past.) 

Such a referendum would be decided by a simple majority of votes cast, he said.

“This is a very somber budget message,” Councilman Greg Puliti said after Krawczun offered his recommendations.

Councilman Michael Powers was particularly alarmed about what would happened if the township’s surplus was reduced so low. “That would be very dangerous in terms of our ability to address any unforeseeable event in the future,” Powers said, noting how costs to the township resulting from Hurricane Irene alone exceeded $30,000 last year.

Councilwoman Cathleen Lewis, acknowledging that she and Councilman David Maffei are less than a month into their council terms following last year’s election, said, “As one of two new kids on the block, I think it would be helpful as we look at this somber picture to look at any suggested cuts that the administration might think of or anything that the council has looked at in the past that we may want to reconsider.”

To help council members make a decision whether or not to authorize a voter referendum, heads of the township’s various departments will appear at the Feb. 7 meeting to suggests what cuts can be made and what impacts those cuts will have on the delivery of township services.

Accounting in large part for the township’s financial hardship, Krawczun explained, is the loss of $38,349,816 in ratables during the last year and the total loss of over $167 million to the township’s tax base in the last five years as the result of successful commercial and residential property tax appeals.  

The $38.3 million loss is worse than the estimated for 2012. (While the process of drafting the 2012-2013 school year budget is still underway, Lawrence Township school district Business Administrator Thomas Eldridge said today that despite that additional $8.3 million loss in ratables, the proposed school tax rate increase for 2012 thus far remains at 3 cents.)

The loss of $167 million in ratables, going by last year’s municipal tax rate of $0.84, represents a loss of $1.4 million in tax-generated revenue for township operations in 2012 alone, Krawczun pointed out.

“The taxable value of property in Lawrence Township for 2012 is $2,527,842,792. A decrease in taxable value simultaneously reduces the value of one penny on the tax rate to $252,784 from the 2011 level of $256,619. At the same time, this decrease in the value of a penny forces up the tax rate even if there were absolutely no other changes in the budget,” Krawczun stated in the 2012 Municipal Budget Recommendation packet he both distributed and read into the public record at last night’s meeting.

If the municipal tax rate was to be increased by 5 cents to $0.89 per $100 of assessed property value, the owner of a home assessed at the township’s current average of $160,828 would pay an additional $80.41 in municipal taxes in 2012.   

Lawrence Township’s municipal tax rate increased by 6 cents in 2010 and by another 6 cents in 2011.

Also contributing to Lawrence Township’s financial woes are that over the past several years the township has not been able to regenerate surplus at a level equal to or greater than the amount of surplus used as budget revenue and that state aid has been cut. To illustrate this, Krawczun pointed out that in 2008 the township had a surplus balance around $9.5 million but that balance had shrunk to just over $5 million by the end of 2011, and that in 2009 state aid was $5,008,000 (and in previous years higher) but was just $3,982,000 last year.

It is not yet known what amount of aid the state will offer Lawrence Township in 2012. Also unclear is what affect rising operational costs by the Ewing Lawrence Sewerage Authority will have. “That increase [by ELSA] will necessitate the adjustment of sewer service fees but the apportionment to Lawrence Township users is not known at this time,” Krawczun stated in his 2012 Municipal Budget Recommendation.

“At this time I find that it is my fiduciary responsibility to recommend to the Lawrence Township Council that although the 2012 recommended budget complies with all statutory requirements, specifically the ‘cap’ on the municipal tax levy, the proposed 2012 budget contains surplus as revenue that cannot be regenerated to the same level. The inability to successfully regenerate $4,870,000 of surplus for use in the 2013 budget leads me to make a recommendation that a referendum be held in 2012 to exceed the state-imposed mandatory limit on the municipal levy,” Krawczun further stated.

While the 2012 recommended municipal budget includes some salary increases – the result of previously-negotiated labor agreements with township employees – it includes no layoffs and only one new position: a part-time plumbing inspector.    

“The recommended budget presented in this package contains an increase in 2012 appropriations over the 2011 adopted budget in an aggregate amount of $479,000 or 1.14 percent. This point is raised to reemphasize that the increase in taxation is not caused by spending but primarily by the decrease in ratables and declines in revenue,” Krawczun stated. “A thorough and thoughtful review of appropriation requests was conducted prior to any recommendations being presented for inclusion in the 2012 municipal budget. Many departmental expense budget appropriations remain at the same level as in prior years. The levels of recommended appropriations for some departments are at levels where service responses will be negatively affected.”


Excerpts from Lawrence Township Manager Richard Krawczun’s 2012 Municipal Budget Recommendation:

"The core principles that have been historically applied to the preparation of the Lawrence Township Municipal Budget were again employed in the development of the 2012 budget recommendations. Those principles focus on balancing the level of provided municipal services and the cost to taxpayers for support of those same operations. Negatively influencing the municipal budget is the economic condition of our times, the regressive form of taxation by which tax revenue is produced and a statutory environment that aggressively manages local government budgeting. The dichotomy of those principals and these external factors produce a struggle that heavily influences the management and fiscal operations of our township. The 2012 recommended budget continues consideration of future budget conditions as well. Consideration of budgets beyond 2012 will need to be aggressive."

"Lawrence Township municipal government provides essential services to over 33,000 residents and many tens of thousands of others who pass through our community on any given day. Many of these services operate around the clock, such as Police, Emergency Medical Services, Fire Protection, Public Works, Health, Animal Control and Construction. Other available services and operations are general health services, financial operations, recreation programs, senior citizen programs, planning and zoning functions, building inspections and permitting. Unlike the private sector where organizations are often restricted by what they cannot do, public agencies are in many areas mandated for what they have to do. The divide results in many public sector operations have a ‘floor’ at which a public organization cannot go below when providing for these mandated responsibilities. Simply, local government does not always have the same luxury as a private sector organization to sell or eliminate an unprofitable division. Nevertheless, we continually strive for the optimum level of economic efficiency in all municipal operations and programs."

"The internal, external and statutory matters that bear upon the 2012 recommended municipal budget are in some cases new and in others continuing trends that have been developing…."

"Surplus, Miscellaneous Revenue, Receipts from Delinquent Taxes and Current Taxes are the four categories of revenue available for anticipating in a New Jersey municipal budget. State statute regulates the amounts that may be anticipated from each of the individual categories. Working within the statutory parameters does not negate the need to carefully consider revenues in both the context of a current budget and future budgets simultaneously. Revenues should be considered with both a historical perspective on the amounts of revenues realized from specific sources and the likelihood those same levels can be maintained. Equally important is anticipating revenues at levels that may contribute to the regeneration of surplus and not too an aggressive approach that will eliminate sources prematurely from use in future budgets."

Sam January 19, 2012 at 12:11 AM
What a crock....Every year the budget is presented with these exaggerated outlandish proposals in the beginning. Over the next few months the politicos will scale back their exaggerated proposals into a reasonable budget patting themselves on the back for hard work and found money. Not sure what the department heads are going to cut back because it was reported several months ago on the Patch that the township departments were cut back to "bare bones" already, that essential services is what was left.
Angelo Longo January 20, 2012 at 06:15 PM
Too bad the township didn't have the opportunity to build a hospital, like Hopewell, to raise tax funds.
Linda February 07, 2012 at 06:43 PM
Angelo I could not agree more! I called the office of Richard Krawczun 3 times to voice my concerns about the Capital Healthcare Hospital. I articulated how wonderful I thought it would have been for Lawrenceville to have a state of the arts hospital here . I also said how great it would be for jobs, not to mention the new revenue it would bring to Lawrence. I also mentioned the benefits to life saving emergencies it would be to have a hospital in such close proximity only to be told by the "secretary", a real genious, that we have hospitals in Trenton. I said 5 to 10 minutes could a matter of life or death. I would love to be a fly on the wall when these same, I repeat same, tired old politicians do this wheeling and dealing at the expense of our pocketbooks!
Linda February 07, 2012 at 06:49 PM
NO MORE, NOT ONE PENNY MORE should go to this tiny little click! There is no money, so try this one Richard Krawczun and Lawrenceville Council, CUT BACK, the rest of us peons have to do it!
MINUTEMAN February 13, 2012 at 06:34 PM
cathy g February 14, 2012 at 01:39 AM
Wow, Linda, your efforts are admirable! I wish everyone cared as much and called. I know they are not easy to deal with. That secretary you refer to, one of my fellow CHS volunteers said she asked how she could volunteer with us. I wonder if it was the same one you talked to.
Winston February 14, 2012 at 03:36 AM
This is a scam perpetrated by the league of municipalities. They are all colluding and presenting similar outlandish budgets. South Bruswick is doing the same thing claiming last years snow is responsible for a 5% tax increase.
bark34 February 14, 2012 at 04:32 PM
Well I for one was NOT in favor of a hospital in Lawrence, especially when it was going to be on the same street I live on and less than a mile from Ben Franklin Elementary school, to name a few. No...I didn't want ambulances racing down Princeton Pike during times when my kids were walking to and from home and no...I didn't want all the crime and riff-raff to be so close to home. There are at least 3 hospitals within a 5 minute radius of where I live...I'll take my chances thanks. And let's see if people would be so gun-ho about a hospital if it was gonna be built on their street...mmmmm...I doubt it. Sure there would have been some positives about having Captial Health in Lawrence, but too many negatives for me personally to have agreed with it.
Linda February 15, 2012 at 07:37 AM
Bark if I were you I would be more concerned with the pedophiles while my children were walking home from school.......hmmmmmmm You live on Princess road? There is already so much rift raft in Lawrence.
Duke February 15, 2012 at 01:46 PM
Bark = selfish Lawrencian. If your kids were properly supervised the ambulance driving down the pike wouldn't be an issue. There coulda been a request for an entrance off 95 so you didn't get bothered at your home at the end of Princess Rd. Do you take yourself seriously? What a ridiculous comment "I'll take my chances".
bark34 February 15, 2012 at 02:28 PM
You mean just like the ridiculous comments: We need a hospital in Lawrenceville?? What are we Philadelphia?? New York City?? Puh-lease. Don't be so lazy...hop in your car and take the whole 5 minute drive to Captial Health in Hopewell. Or the 5 minute drive to Regional on Brunswick Ave in Trenton. And don't tell me to properly supervise my kids, tough guy. I walk them to school everyday. Talk about ridiculous comments: uh...if they were properly supervised?? Gee...don't you think genius that it would be possible for an ambulance going 70 mph down Princeton Pike could jump a curb wipe out all of us?? Bottom line is it was built in Hopewell, not Lawrenceville so frankly it's a mute discussion at this point isn't it?? Move to Hopewell if you don't like it.
Linda February 15, 2012 at 05:37 PM
Sure hope you or anyone in your family doesn't get any type of an emergency where five minutes would make a difference! And what are you saying it would be ok if an ambulance was racing 70 mi. per hour into the city to get you there? It would be ok to run over someone else's child. Puh-lease you are a typical Horray for me and the he11 with you type. Must be a lib! How fast are you driving mother of the year to get to Helene Fuld or Capital Health Care to make it in 5 mins. No my dear it is you who is ridiculous!
bark34 February 15, 2012 at 06:19 PM
Hey guess what sweetheart?? They built your wonderful hospital in Hopewell, not Lawrenceville so looks like I win no matter what George W. Bush views you come up with!! Cry me a river about it...
Rose Smith February 15, 2012 at 10:29 PM
Pay cut??? HAHA His name aint "Rich" for no reason!!!! Cut free preschool for the state employees!! They say this preschool program is for low income but look at the kids in there they have parents with double income and either work as attorneys for the state or are teachers in Lawrence. I know a lot of families that tried 4 or five times for the lottery slots and they dont get it BUT these state/municiple workers hit it like 2 or 3 kids times????? Hmmmmm boy are they "lucky" they can afford the taxes but those on one salary or fixed <retired> incomes struggle
Rose Smith February 15, 2012 at 10:34 PM
read the Patch the riff raff is in your neighborhood even with out the hospital. Emergency vehicles go up and down P-Pike all day anyway. < I live there too> Where were they going to put it on the Pike?? No room - are your facts right?
Rose Smith February 15, 2012 at 10:36 PM
Bark's kids walk from Princess Rd to Ben Franklin??? You're right about the supervision - I wouldnt let my K-3 grader walk that???!?
Rose Smith February 15, 2012 at 10:44 PM
You are SO missing the point - they are saying enough with raising taxes and find better ways to raise the revenue then to hit those of us that dont have the silver spoon in our mouths!!!!!! Enough is enough with raising taxes!!!!
Linda February 16, 2012 at 12:52 AM
Bark34 First of all I am not your sweetheart , and I might add I'm glad. I do however feel sorry for your husband as I am sure you are a nag. So tell how do you like living so close to the Howard Johnson or the Sleepyhollow? How about the Nursing Home? Does it bug you to know that ambulances go in and out of there everyday? And moronicbark how did GWB get into this moronic conversation? You must be an Obama girl, you certainly have the mentality. Oh and I didn't know there were homes on Princess Rd! I can only hope you don't need one of those pesky ambulances anytime soon for you or any of your family members. Karma baby!
Lawrence Guy February 16, 2012 at 02:49 AM
The hospital is a non-profit organization and does not bring in the tax revenue that you think.
Linda February 16, 2012 at 03:02 AM
Who is Richard Krawczun's boss, does anyone know?
cathy g February 16, 2012 at 03:53 PM
Mr K was appointed by town council. As I recall, he worked in afinancial position under Guhl previously. He should be answerable to us since we elect council. Otherwise, I would say some in Christies office should be able to assist/direct you. Hope that answers your question
Linda February 16, 2012 at 06:53 PM
Cathy g Thank you. I want to call the extorionist and ask him exactly what options to the voters have. Why are they having that ridiculous "vote in April. What he says is either you pass the tax increase or we will screw you with the garbage collections. I really don't have a choice as I see it! I sit in amazement at how the numb-nuts keep electing these same thieves over and over again! So much fools for the cap in our property taxes. I wish moving was an option, but it is not. I will be calling him, not that I expect I will get him the coward, to ask him if there is something I am missing here. Thanks again.
Linda February 16, 2012 at 06:55 PM
what options *do the voters have.
Bow Hunter February 16, 2012 at 08:21 PM
We have no options. We are the victims of irresponsibility. If council and the manager were really concerned about taxes they would find ways to cut. Little spending cuts add up quickly to save a dime. I don't care if the new fields on Little Acres cost a dollar, that is a dollar of tax payer money the could have been saved. What about twp officials driving twp cars all over the state to and from work? PSEG stopped this practice because of the cost savings in gas and maintenance. Why can't Lawrence do the same? If you live outside if Lawrence you lose your ake home car, PERIOD. Look at what this town is becoming. The parks get mowed when the grass is a foot high. Ever think of ticks, unsafe walking, bees, etc? The police and public works are understaffed. Crime is up. A proposed tax referendum to raise taxes and a threat that either it passes or you get screwed anyway. This is not what I signed up when I moved here. Time for someone to finally take charge and make change NOW. The taxpayers are struggling and we are tired of waiting for someone to take charge.
Nancy Ann Jamison March 11, 2012 at 12:30 AM
What a nasty bunch you are. No wonder we can't live like the peaceable kingdom. I'm sure you've all seen various species of animals--anything but human ones--getting along. Wag more, bark less! i will be taxed out of my send home if this goes through. Pennington Borough did me in the first time.
Nancy Ann Jamison March 11, 2012 at 12:30 AM
that was "second" not "send"


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