RED BANK — A stiff increase in borough employee health and other insurance will likely mean an increase in property taxes.
The Borough Council last Wednesday introduced its municipal budget that contains a 2.3 cent increase over the current rate for each $100 of assessed valuation.
The proposed $28.7 million budget would raise the municipal tax rate to .532 from its current .509, according to Councilman and Finance Committee Chairman Michael R. DuPont and Colleen Lapp, the borough’s chief financial officer.
A penny on the tax rate equates to $224,000, officials said.
“This is a work in progress,” DuPont insisted, and department heads and other officials would continue to strive to bring down costs prior to the budget’s final adoption.
Officials say that rising insurance costs are behind the projected tax increase.
This budget, Lapp explained, represents a $463,693 increase in what the borough pays for insurance premiums. That number is for all insurance coverage, “but mostly health,” Lapp said. That amounts to a 22 percent increase in health insurance costs, “without any justification,” DuPont said.
The borough purchases its insurance through a state health insurance fund (HIP), which is a collection of municipalities, which came together to try to obtain the best prices for insurance. But given this rise, with what DuPont said was lack of transparency, “I think it cries out for a need for reform,” he said.
Another contributing factor for the tax hike, officials said, was for $135,000 already paid out, or scheduled to be paid within the next couple of months, for property tax appeals.
With the lessening of property values related to the economic crunch over the last three years, the municipality has experienced a spate of appeals, with property owners contesting their property assessments and what they were determined to owe. In many cases the property owners and borough attorney negotiate a settlement, which can result in tax refunds and reduced payments to the borough.
“There is good news in this budget,” DuPont continued, referring to higher construction permit fee collection, thanks to some new building, amounting to $76,000. And, “We got a late Christmas present,” he added, referring to the fact that the lack of snow saved the borough money. The proposed budget comes in at below the state-mandated two percent cap increases, officials said.
The council’s finance committee plans to hold public input sessions on the budget and a formal council public hearing on the final budget expected to be presented at the April 25 meeting, DuPont said.
- TRT Almanac