Municipal Aid Flat for 2012

’s municipal aid remains flat for the second year in a row, though costs for insurance and other factors will likely rise in 2012.

“It doesn’t exasperate the situation for developing our budget,” Mayor Carl Suraci said. “It’s obviously still a challenge because that part of our revenue remains flat.”

According to figures released from the state on Thursday, Hillsborough will receive $3,265,664 in municipal aid in 2012, the same amount it received in 2011.

Though the township’s Finance Committee has not met to discuss its budget, the concern is costs that continue to rise each year—particularly insurance increases, contractual salary obligations, and pension payments that may be beyond the 2 percent tax levy cap.
“Other costs continue to rise, like pension payments, insurance costs and fuel costs,” Mayor Suraci said.

It is the first year that the township’s had personnel contribute to their health benefit costs, which could offset a portion of the health insurance payments Chief Finance Office Nancy Haberle noted.

The township is also involved in contract negotiations with the Policeman’s Benevolent Association Local 205, the Dispatcher’s Union, and the Department of Public Works, which will factor into the town’s budget planning, Mayor Suraci said.

The town’s energy tax receipts remained flat this year, something township officials would have preferred to see change in 2012. The state’s Energy Tax Receipts Property Tax Relief program provides funds in lieu of property taxes for sites holding public utility structures, such as power lines, natural gas utilities, private water and sewer corporations and telecommunications utilities.  Since municipalities cannot collect property taxes on land used for public utilities, the program is meant to compensate for the lost revenue.

About two years ago, municipalities statewide saw a dip in funds from that program, resulting in a drop in the town’s revenue.

“Prior to two years ago, they had always steadily increased, even if it was a small amount” Mayor Suraci said. “If you recall, two years ago, that amount of money was reduced. I would have liked to see that restored since that was a tax receipt.”

The flat aid is coupled with an anticipated decrease in revenue from other areas, though Mayor Suraci did not have specific details on those areas. However, he did confirm that fees from building permits dropped this year, following a slight increase in 2011.

With its figures from the state, the Finance Committee and Haberle will begin the process of creating its final budget.

“Now, I’m going to meet with the Finance Committee and we’ll look at what we have coming in and what we have going out, and we’ll start to make whatever cuts are necessary to balance the budget,” Haberle said. “We’ll just keep working back and forth until we get it down. It’s kind of a tedious process.”