In his annual “State of the State” address, New Jersey Gov. Chris Christie promoted consolidation and civil service reform as a way to reduce property taxes. He then cited the consolidation of Princeton Township and Princeton Borough as an example of success and tax savings.
“Look at what happened last year in Princeton. Princeton Borough and Princeton Township consolidated into a single government. Not two tax departments, two police forces, two offices answering the phone. The savings in one year: $3 million. That’s on a budget of $64 million, a 4.7 percent savings,” Christie said. “And the citizens of Princeton got this: more services, despite a smaller budget, and a reduction in municipal taxes.”
Christie’s numbers are incorrect. The myth that the consolidation of the two Princetons would save $3 million in the town budget was debunked at a Princeton Council meeting last year, when some Princeton officials and consolidation advocates boasted that the consolidated Princeton budget for 2013 was $3 million less than the combined budgets for the two Princetons in 2012.
It turned out that $2.3 million of the $3 million was not actual savings.
Princeton Borough and Princeton Township both included expenses and revenue for the shared services the two municipalities jointly operated in both of their budgets every year. The former Borough and Township shared more than a dozen services, including a health department, a recreation department, and a human services department. To get to the $3 million savings figure, the Township and Borough budget totals were simply added up without accounting for the duplication.
As an example, let’s say the Borough ran a joint service that cost $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 both budgets.
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. But a $3 million is a much more impressive sounding number than $700,000.
When the $2.3 million shared services budgeting duplication is taken out of the equation, the actual decrease in the budget for the combined Princeton for 2013 was about $700,000. That’s a 1.1 percent reduction.
The only reason the duplication even came up in the budget discussion last year was because a resident asked officials to debunk the rumor on the streets that $2 million of the $3 million was not actual savings. To the resident’s surprise, officials confirmed that $2.3 million of the $3 million reduction included the duplicate shared services figures.
The original proposed budget for 2013 included a reduction of .7 cents per $100 of assessed property value and a municipal tax rate of 46.3 cents. That rate is in line with a $700,000 decrease in the overall budget. But town officials decided to dig in to the municipality’s surplus to lower the tax rate. Council President Bernie Miller voted against the budget because he didn’t think the town should be using so much surplus.
The consolidated tax rate for 2013 was 45.4 cents per $100 of assessed property value. The 2012 rate in Princeton Borough was 47 cents per $100 of assessed property value, and the Princeton Township municipal tax rate for 2012 was 47.1 cents per $100 of assessed property value.
In 2012, the owner of a home assessed at the 2012 Borough average of $747,665 paid about $3,514 in municipal property taxes. If that average homeowner’s assessment remained the same this year, the homeowner would pay $3,395 this year, or about $119 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 $3,753 in municipal taxes this year, or about $140 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.