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$3 Million in Budget Savings from Princeton Consolidation? Not So Fast

Some Princeton officials and consolidation advocates are boasting that the consolidated Princeton budget is $3 million less than the combined budgets for the two Princetons last year.

But people are glossing over the fact that $2.3 million of the $3 million is not actual savings.

Princeton Borough and Princeton Township both included the same costs for numerous shared services the two municipalities jointly operated in each of their budgets every year. Simply adding up the two budgets is not a fair representation of the savings, because doing so does not account for the redundancies in the budgeting for shared services (the Borough would reimburse the Township for some shared services costs, and vice versa).

For example, let’s say the Borough ran a joint service that was $1 million a year. The Township reimbursed the Borough for a portion of the cost to operate that service. Both the Township and the Borough listed the same $1 million joint service in their budgets as line items. But the total cost of the service was still only $1 million. It was just accounted for in each budget.

If the $2.3 million shared services budgeting duplication is taken out of the equation, the actual decrease in the budget for the combined Princeton is about $700,000.

A more accurate picture of the budget savings this year when comparing it with last year would have been to only count the shared services budget once.

Consolidation Commission Chairman Anton Lahnston raised the issue at the Princeton Council meeting Monday night during the 2013 budget introduction, asking how shared services played in to the budget equation.

“Shared services accounted for about $2 million of the budget in the Township and the Borough. How did that get played out in the current budget?” Lahnston asked. “There is a story on the street right now about this. I think the public ought to  be informed about it.”

Officials acknowledged that $2.3 million of the $3 million reduction included the duplicate shared services figures. In other words, the $2.3 million shared services budget was counted twice when tallying the Township and Borough budgets from last year that were compared with the proposed budget for this year.

There was double counting in the old system, Mayor Liz Lempert said. Both governments had to account for the shared services spending and revenue in their budgets.

“But the good news is from consolidation the budget is a lot cleaner now as so that you can see what is actually being spent as opposed to the shuffling back and forth,” Lempert said.

During public comment Monday night, resident Joe Small called on the governing body to provide a detailed breakdown of the expenses and savings related to consolidation and the transition, and to follow up and compare the figures with the estimates and recommendations that were made by the consolidation commission and transition task force.

“It is extremely important that in your hearings on the budget, somebody prepare a report that compares all of this, show what the  the total tax impact and how it affects citizens,” Small said. “The citizens are really confused.”

The $61 million 2013 municipal budget for the consolidated Princeton was introduced Monday night by a unanimous vote. A public  hearing will be held on the budget at the Council’s 7 p.m. public meeting on May 28 in the main meeting room of the municipal building at 400 Witherspoon Street.

Officials said that under the proposed budget, property owners would see their taxes decrease .7 cents per $100 of assessed property value. The proposed municipal tax rate is 46.3 cents. Officials said property owners in both Princetons paid about 47 cents per $100 for municipal property taxes in 2012. Borough property owners paid about 46.8 cents per $100 of assessed value, and Township property owners paid about 47.1 cents.

In 2012, the owner of a home assessed at the 2012 Borough average of $747,665 paid about $3,499 in municipal property taxes. If that average homeowner’s assessment remained the same this year, the homeowner would pay $3,462 this year, or $37 less than last year.

The owner of a Township home assessed at the township average of $826,636 paid $3,893 in municipal taxes in 2012. If that average had remained the same this year, the homeowner would pay about $3,827 in municipal taxes this year, or about $66 less than last year. That Township homeowner is also receiving trash pick up through the municipality now.  Township homeowners previously had to pay for private trash pick up out of their own pockets.

Because of consolidation and adjustments in property assessments, the average assessment has changed for the combined Princeton. The new average is about $799,600. Under the proposed budget, the owner of a home assessed at the new average would pay about $3,702 in municipal taxes for 2013.

Krystal Knapp

Krystal Knapp is the founding editor of Planet Princeton. She can be reached via email at editor AT planetprinceton.com. Send all letters to the editor and press releases to that email address.

  • RW

    Thank you for this article. I attended Monday’s Council meeting and I heard what you heard but then thought that perhaps I missed something because surely somebody on the Council would caution that the Public may be misled by the $3,000,000 figure. Until your report nobody has explained how the shared-services duplication inflated this year’s savings. Indeed, other media outlets have trumpeted the $3M number. Sadly, it appears that Council and Mayor have misled us.

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