Flat Aid a Relief for Municipal Officials

Flat municipal aid came as a relief for township officials listening to Gov. Christie’s budget address yesterday, though they noted that cost increases elsewhere would remain a challenge during budget planning.

“It is good news for CFOs and those trying to maintain budgets,” Hillsborough Mayor Gloria McCauley said during the Tuesday night Township Committee meeting.  “I’m proud to know they are trying to maintain budgets.”

Gov. Christie’s $29.4 billion dollar budget is a 2.6 percent reduction from last year’s $30.2 billion dollar budget, and includes $200 million in tax cuts.  The budget calls for pension and benefit reform as well as education reform.

The budget address offset several of the concerns voiced during mayor’s day in Trenton last week, McCauley noted.  Those concerns included pension and benefit costs, which typically rise higher than budget caps.

The governor’s budget also means flat municipal aid, after several years of aid reductions.  In 2010, Hillsborough saw a $838,000 reduction in state aid and a $800,000 increase in costs, according to the township’s web site.

“It’s the first time in three or four years we haven’t seen a reduction in aid,” Deputy Mayor Carl Suraci, who is also Finance Committee Chairman, said.  “It makes a difficult situation a little bit easier.”

The budget includes $250 million in state funding for schools, which the committee said would translate into about $1 million dollars in aid for Hillsborough Schools, according to committee members.   The number, however, is an estimate, and committee members also noted that the committee has no input on school budget development unless it fails during April elections.

 Last year, Hillsborough schools saw aid reduced by $5,160,458, forcing the district to cut 82 positions in its preliminary budget.  It was then forced to cut additional positions after the budget failed during the April elections.

“I was shocked at that too because of the cuts we had last year,” McCauley said.  “That will be good news for the schools.”

Though committee members estimated the district would receive $1 million in aid, the numbers have not been confirmed by the state.  Committee members also noted that the Township Committee does not have any input on the school budget development.

The estimated $1 million would still put the district below its 2009-2010 school year aid amount, which came in at $26,345, 001.

Both the township and the school district face a budget season under two percent budget caps, which can cause a challenge when costs balloon past two percent.

In the township the costs causing the most concern include benefit and salary increases which are above the cap.  According to Committeeman Suraci, the costs for healthcare premiums increased by double digits again this year, though he did not have an exact increase number, he said.

“We still have our own uncontrollable costs that are above that (2 percent),” he said.  “We still have a budget gap that we are trying to reduce before we introduce a budget.”

Suraci saw the push for benefit and pension reform as a way to close the budget gap his committee sees currently.

“That could certainly go toward closing our budget gap, more than the 1 percent we currently have,” he said.

But one component of the budget and potential reforms is missing, officials felt.

“What we would still like to see is the toolkit,” Suraci said.  “We’re still waiting for the Legislature to provide the guidelines for the toolkit.”