The Borough Council unanimously voted to reintroduce a 2012 budget tonight that includes no tax increase. The budget had to be reintroduced because some changes were made to it. The final vote on the budget is scheduled for May 8 at 7 p.m.
If the budget passes, this will be the fourth year in a row that the governing body of Princeton Borough adopts a budget that does not increase municipal property taxes.
The Borough Council voted tonight to reintroduce a budget of $26.4 million for 2012, an increase of $546,000 over the 2011 budget. The proposed tax levy is $10.3 million.
Resident Anne Neumann of the Borough’s affordable housing board asked the Borough Council to fund a loan program for residents who can’t pay their property taxes. Neumann said residents are still suffering because of the recent property revaluation and some seniors and more moderate income residents are struggling to pay their property taxes.
“Residents who receive the loans could remain in their homes longer near family and friends and would not be forced to sell their homes in the down market,” Neumann said. “The program is more beneficial than a reverse mortgage, where the costs are high.”
Residents would pay back the loan when they sell their homes. Neumann said such a program would promote diversity and maintain housing values in the Borough. She argued the program would cost the Borough nothing in the long run because interest would be charged on the loans. If the Borough provided $200,000 a year for the program, Neumann said up to $5,000 could be loaned to up to 40 Borough households.
Neumann said the board is in the initial stages of researching a possible program. Council members said the board should consult a lawyer. Councilwoman Jenny Crumiller said residents reacted negatively to the idea of a loan program when it was suggested after the revaluation. Neumann said it would be important to distinguish between a reverse mortgage program and a direct loan program.
Neumann said the Borough could use voluntary payments in lieu of taxes from Princeton University to cover the program. Councilwoman Barbara Trelstad said the Borough needs to research what the needs in the community are first and consult with the University before making assumptions about how the money should be spent. Kristin Appelget, director of community and regional affairs for Princeton University, said it us up to the Borough to decide how to use the voluntary payment funds, except for the $250,000 that was earmarked for consolidation costs.
Councilman Roger Martindell said a joint revaluation study commission came up with proposals for solutions related to the property revaluation in a report issued last year. He said any loan program would need to be flushed out in detail and added that a larger loan amount might be necessary given the amounts people owe for their property taxes. Martindell also said the Borough should avoid portraying a reverse mortgage program as a “boogeyman.” If such a program were run by the town it could be a positive thing, he said.
Martindell suggested that the Borough use the remaining funds in its affordable housing trust to fund a loan program. The Borough must spend the money by the summer or the state will take it away.
Borough Lawyer Henry Chou said the Borough could set up a low-interest loan program with the funds, but residents would need to be income-qualified and have a deed restriction on their homes for five to ten years.