The that will take place next month is, without doubt, the topic of discussion in Lawrence Township right now. Residents are talking about it everywhere. They’re holding family meetings about it at the dinner table; they’re debating about it with coworkers, neighbors and strangers they meet in the checkout line at the local deli; and they’re arguing about it in online forums and at public gatherings like the one that took place .
If township voters approve the referendum on April 17, the municipal tax rate will increase 9 cents above what is allowed by the state’s 2 percent tax levy cap and residential trash collection will remain unchanged. If voters reject the referendum, the municipal tax rate increase will stay below cap but residential trash collection will be removed from the municipal operations budget; trash costs will instead be covered by a new “user fee” assessed against all residential property owners in town.
In recent days several township residents have been overheard publicly stating that they plan to vote against the referendum and not pay the trash user fee that would result from the referendum being defeated. These individuals have said they would find alternative means of disposing of their household waste.
What these individuals apparently do not realize is that they would not be allowed to decline residential trash service to avoid paying the “user fee.” And failure to pay such a fee would be handled under the law in the same manner as a property owner not paying taxes – the owner would face late fees and interest and, eventually, have a lien placed against their property.
“If a trash user fee is instituted there would be no ‘opt out’ provision,” Township Manager Richard Krawczun confirmed on Tuesday. “The user fee would be considered a municipal charge and unpaid municipal charges are subject to being included in the [annual] .”
The additional 9 cents that the municipal tax rate would increase if the referendum is approved by voters would add another $144.75 to the 2012 municipal tax bill for the owner of a home assessed at the current township average of $160,828.
Currently, trash collection and trash disposal “tipping” fees are paid by the township through its municipal operations budget, with the costs being shared equally – through the collection of municipal taxes – by both homeowners and commercial property owners, even though commercial properties do not benefit from the trash collection services.
If the referendum is rejected and trash collection is removed from the municipal budget, residential property owners would have to pay the new user fee – which has been estimated at about $336 per year. The user fee would not be assessed against commercial property owners.
Krawczun and council members have repeatedly noted that, for most homeowners, the 9-cent tax rate hike via approval of the referendum would ultimately cost less than the trash user fee that would result from the referendum’s defeat.
The township manager and council members have also pointed out that municipal taxes are deductible on individual income tax returns, representing further savings, whereas trash user fees are not deductible.
“Approval of the tax levy referendum will continue to provide for the payment of trash collection services through the municipal budget and the additional amount will remain tax deductible. Disapproval of the referendum will require the establishment of a user fee for trash collection services that would not be tax deductible. Residents would not be able to ‘opt out’ of the service. In addition, the user fee would be treated under the law as a municipal charge and treated in the same manner as unpaid real estate taxes subject to tax sale,” Krawczun explained.
The referendum on April 17 will be held in conjunction with the and .
The referendum will ask voters to approve a 9-cent increase to the municipal tax rate, in addition to a 5-cent increase already built into the 2012 municipal budget.
The 5-cent hike will raise the municipal tax rate from $0.84 per $100 of assessed property value to $0.89, meaning that the owner of a home assessed at the township average of $160,828 will pay about $1,431 in municipal taxes for 2012, or about $80 more than in 2011.
The additional 9 cents, if approved through the referendum, would raise the municipal tax rate to $0.98, increasing the 2012 municipal tax bill for the average home owner by $144.75.
The likelihood of a referendum was first discussed when Krawczun presented his and explained that the township had some tough financial choices ahead thanks, in large part, to a cumulative decline of more than $167 million to the township’s tax base due to successful tax appeals by commercial and residential property owners during the last five years, including a loss of $38.3 million during 2011.
At that Jan. 17 meeting, Krawczun explained that 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 levy 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
Having to use 97 percent of the surplus fund to balance this year’s budget would leave the township financially unable to respond to a natural disaster such as a hurricane or other unforeseen crisis, and would also create “catastrophe” in 2013 because not enough surplus would be available as a revenue source to help balance the 2013 budget, Krawczun has said.
Krawczun estimated that about $2.6 million in surplus will be “regenerated” this year through the collection of delinquent taxes, along with fines and interest, and “unanticipated” revenue like fines generated by the red light traffic enforcement cameras on Route 1. That, according to Krawczun, meant the township could use an equal amount of surplus as revenue to balance this year’s budget. But in order to leave the remaining money untouched in the surplus fund this year for use later in 2013, the township had to find another way to plug the resulting $2,275,000 hole.
With that in mind, , Krawczun explained how the additional 9-cent increase, approved by referendum, would generate the money needed to balance the budget and preserve the surplus fund. During that same meeting he first discussed the trash user fee option.
, following a request from council for such a scenario, Krawczun outlined a plan that would balance the budget by eliminating all recreation programs and firing 36 township workers, including essential personnel like eight police officers and all ambulance staff. Council members ultimately rejected the layoff plan after Krawczun explained that the loss of so many workers would have a devastating effect on township services.
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