The Township Committee (TC) gave the public the first look at the budget for 2021 at their February 2, meeting. Spending is set to increase 3.8% while tax revenue is to increase only 1.6%, primarily because HT will dip into its surplus.
First, it’s important to put this report in context: this is only about the fiscal affairs of the Township. Your property taxes also go the Harding School and Morris County. The TC has virtually nothing to do with those entities, their budgets and their tax levy. Here’s the breakdown of where your property taxes went in 2020, which will be very similar to 2021 when all the numbers are collected:
46% – Harding School — $10.6mm – controlled by the Harding Twp Board of Ed
25% – Harding Municipal – $5.8mm – controlled by the Township Committee
4% – Harding Open Space Trust – $0.8mm – controlled by the Township Committee
24% – Morris County $5.7mm – controlled by the County Commissioners
1% – County Open Space – $0.2mm – controlled by the County Commissioners
To be clear, this report will cover only the 29% of your property tax bill set by the TC.
HT will spend over $9.6mm in 2021 a 3.8% increase over 2020. About 60% of the spending is for employ compensation and benefits. Though headcount remained the same, this part of the budget rose almost 5% due to:
- Contracted increase in salaries – PBA (police) contract still to be determined;
- Increase in health insurance – 2% premium increase and a number of employees who were not covered in prior years have opted into the plan;
- Pension contribution increase – +22% for Police plan and 10.3% increase for other plan.
The 40% of the expenditures that are non-employee related are up 2.3% driven by a $78K increase (78%) increase in HT share of the joint court – the court that we share with a few other towns. Our share is popping because our usage remained largely the same, while the other towns with which we share the court decreased. This arrangement is under scrutiny by the TC. Capital budget remained about flat.
Debt service is budgeted to decrease about $10.9K as the TC pays down its remaining $3.75mm in AAA rated debt. Projections show that HT will be debt free in 2029 unless more borrowing is incurred.
Municipalities must have a balanced budget. The budget calls for $3.7mm from “general revenues” (surplus, various fees, fines) and property taxes (62% of total revs). The budget shows two main sources of incremental revenue:
Surplus ($300,000): (“Surplus” is the excess of revenue over expenses in prior years – similar to retained earnings in a business.) The TC made the case for dipping into the surplus because its reason for being is to smooth tax increases. Without using $300K of surplus to balance the budget, your HT property tax bill would increase over 6%. Even with the drawdown, the surplus will be $4.18mm at the end of 2021, higher than in 2017, 2018 and 2019 when surplus was building. But this is a fund that should be watched in the 2022 budget.
Property Taxes ($99K): Property tax increase of 1.7% will raise the rest of the revenue needed to balance the budget.
The higher tax rate works out to an increase of $47 on the average property in HT which is valued at $1,091,116, down about $5.8K from 2020. This is just the increase for the quarter of your taxes from HT.
The total assessed value of all of the 1931 properties in HT declined $11.3mm from
$2.118B down to $2.107B. This is the result of the township wide reassessment.
The Open Space tax is expected to remain at 4 cents per $100 of assessed value. The OS tax will raise about $843K in 2021 and will be added to the $2.35mm fund at 12/31/20. As the name implies, this fund is targeted for Open Space purchases and maintenance of the properties purchased in years prior.
The TC also presented the 6 year capital plan. In 2021, the total capital expenditures are estimated at $587K:
- DPW – $300K equipment – excavator, chipper, hot box, air compressor, UV…
- Road Improvements – $145K
- Police Equipment and Vehicle – $84.6K
- MIS – $30K
- Township Facilities – $27.5K