Cranbury to Introduce Two-Cent Tax Increase

At Tuesday’s final budget meeting, the Cranbury Township Committee decided that Feb. 28’s budget introduction would include a two-cent tax increase. This decision was not unanimously agreed upon, but four of the five committeemen said that an increase was necessary in order to avoid depleting the township’s surplus money.

Based on Cranbury’s average household value of $608,299, a two-cent tax increase would see residents paying an average of $87 more in municipal taxes than last year.

Cranbury’s surplus currently stands at around $5 million. If state aid remains flat and taxes aren’t raised, the present rate at which the township is using its surplus would result in its exhaustion in approximately four or five years. Township Administrator Denise Marabello informed the committee that maintaining a steady surplus level is important going forward.

“We need to be sure we have a healthy amount of surplus set aside so that we don’t have to go to referendum to raise taxes,” she said. A total depletion of the township’s surplus would force Cranbury to participate in a public vote, which would either raise taxes instantly above the state-mandated cap or else force a near-instant cut in services. The mere act of going to a referendum would negatively effect the township’s bond rating.

Republican Mayor Winthrop Cody was the only member of the committee who said he felt that taxes shouldn’t be raised under any circumstances this year.

“In three years if things are really bad, we may [need to raise taxes]. I hate to raise taxes on people in this economy,” the mayor said before yielding to his colleagues. Cody went on to say that raising taxes now was assuming the economy would continue to get worse, which is something he wasn’t comfortable doing. As a point of reference, Marabello explained that Cranbury’s final assessed value was just announced as about $1.6 billion, which is a decline of $95 million. Marabello’s stated that this figure might remain steady over the next few years, but it’s unrealistic to expect it to increase.

Committeeman Jay Taylor, also a Republican, said he was for the two-cent raise, but only if Cranbury’s state aid total was considerably less than last year’s approximatley $450,000. If the aid doesn’t drop, Taylor said he would only support an increase one-cent or less.

Democrat David Cook stated his concern over the rate at which Cranbury is spending its surplus.

“I’d rather give a tax cut in three years than do nothing now,” Cook said. “We’re burning [the surplus] faster than I think we’re going to replenish it and once that’s gone, the increase in taxes will have to be so high that I think it won’t just be tax increases, there will be service cuts that are somewhat Draconian.”

Glenn Johnson, also a Democrat, echoed Cook’s sentiments and said the increase was necessary regardless of how much state aid Cranbury receives. Republican Dan Mulligan supported the increase, but said he would consider changing his stance if the state aid figure was greater than last year’s. Marabello said that a state aid increase was very unlikely.

Once the tax increase was agreed upon, Taylor suggested to the rest of the committee that the state aid Cranbury receives should be used toward capital ordinances such as the Brainerd Lake Dam repair project. Spending the money in this way would allow the surplus total to remain constant. The other committee members agreed that this was an idea worth looking into.

In 2010, Cranbury was able to put money back into its surplus coffer, but Marabello pointed out that a large portion of this replenishment was from funds left over from 2009, which the township won’t have next year.

According to Marabello, the budget is typically introduced before the state aid figures are made available at the end of March. Prior to April 28’s adoption date, the township is permitted to amend its budget. The Cranbury Township Committee will introduce its budget at its next committee meeting, at 7 p.m. Feb. 28.

Correction: This article was updated Sunday at 3:24 p.m. An earlier version stated the township received $1.1 million in state aid last year, not the correct number of about $450,000, and incorrectly described a budget estimate by Mayor Cody that has since been removed.