Saturday, July 21, 2012

The Record: Englewood Cliffs' council OKs $13.48M budget

Englewood Cliffs' council OKs $13.48M budget

The Record

ENGLEWOOD CLIFFS – Residents will be paying about $20 more a month in property taxes to fund services and replenish the borough’s depleted savings account under a 2012 spending plan adopted this week.
The Borough Council on Wednesday approved by a 5-1 vote a $13.48 million budget, which carries a 6 percent property tax hike.
Under the budget, a home assessed at the borough average of $1.26 million would pay $248 more in municipal taxes this year.
The spending plan is slightly less than last year’s $13.6 million budget, but the borough depleted its $955,000 surplus, leaving nothing to offset taxes this year, auditor Steven Wielkotz said.
Councilwoman Gloria Oh, a Democrat, blamed last year’s Republican-controlled council for overestimating revenue and underestimating expenses while freezing taxes, causing the surplus to evaporate.
“I’m confident the budget this year will put us back where we belong,” she said.
Councilwoman Carrol McMorrow, the sole Republican on the Democratic-controlled board, defended the prior year’s spending plan as one that was conscious of older homeowners on fixed incomes.
“We believe that we should not tax residents to raise surplus, taking monies from our residents who could make better use of their monies than us just letting it sit in a bank,” she said.
McMorrow voted against the 2012 budget, saying that it also underestimated spending. She blamed Democrats on prior councils for waiting until 2008, when real estate prices were high, to re-evaluate property values, leading home and business owners to challenge them now that values have dropped sharply.
“Stop blaming the tax increase on everyone else,” she said.
Council President Joseph Favaro said the county forced the borough to re-evaluate property in 2008, near the height of the housing market. As property values fell, property owners began challenging their assessments – and winning.
“The bottom fell out and we were left holding the bag,” he said. “This is a fair budget with what we had to work with.”
Chief Financial Officer Joseph Iannaconi Jr. said the 2012 spending plan is a “bare-bones budget” that maintains services, but has no cushion for emergencies. Englewood Cliffs would have to borrow money if it is hit with a large unanticipated expense.
The depleted surplus, and high number of tax appeals caused Moody’s Investors Service to downgrade the borough’s credit rating from the second-highest rating of Aa1 to the third-highest rating of Aa2. The downgrade means the borough will have to pay slightly more interest on roughly $16 million it has borrowed over the years for municipal projects.
Mayor Joseph Parisi said the borough was conservative in estimating revenue and aggressive on cutting spending wherever possible.
“No one likes tax increases but there are increases in our expenses.”
Among the increases is an extra $80,000 in police officers’ base pay because 14 were promoted after an arbitration ruling. The department has 26 officers, including 10 patrolmen.

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