Planet Princeton

Christie Perpetuates Myth That Consolidation Reduced Princeton Budget by $3 Million

20111122Princeton102-e1389762171738In 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.

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.

  • Boroite

    Consolidation is great if you don’t my diluting your vote and have someone who lives elsewhere decide to build up your neighborhood in the hopes of a tax break. The smaller entity always loses.

  • Brett Borowski

    It might make sense to borrow against future savings for immediate tax relief.

    But call it what it is.

    I have no background in municipal finances but I’d be inclined to realize savings as they occur. Barring some unexpected upward shock in residents’ total tax bill, I wouldn’t tap reserves or borrow against future savings.

    Regardless, I hope Council’s expected future savings have been more carefully calculated than the $3 million for 2013.

  • SFB

    It’s true that only 0.7 cents of the decrease could be accounted for by operational savings in year 1. But Council was able to make a bigger decrease because of anticipated future cost savings from consolidation. If all things were equal, that would involve ‘tapping the reserves’ but all things are not equal- there will clearly be more savings, hence it was possible to lower the burden on taxpayers straight away.

  • krystalknapp

    Brett is correct on the surplus issue. Otherwise the savings would have been .7 cents per $100 of assessed value for the average homeowner.

  • Brett Borowski

    Right, but 2/3 of that $119 savings came from tapping the reserves and can’t be attributed to the consolidation. Or am I misunderstanding the article?

    2012 taxes on 750k borough house = $3514 x 1.1% = $38 savings

    And if your home is assessed at less than $750K, your consolidation savings are some fraction of the $38.

  • SFB

    The $119 saving is on the municipal portion of tax, not overall tax. So it’s a solid $119. And Borough residents still get brush pickup. (FWIW my home is also worth a lot less than $750K!)

  • Brett Borowski

    It’s not about the relative need of brush pickup. It’s a service borough residents got for the tax dollars before consolidation and didn’t afterwards. Township residents, on the other hand, are no receiving trash pickup.

    As for the $119, only about a 1/3 of that was consolidation-related, no?

    I’m a real penny pincher myself so I’m not going to dismiss the value of $40. (But I’m not going to bring it over to your $750k-ish home.) I do hope that you all realize more substantial savings over time.

  • Brett Borowski

    This demonstrates another aspect to this mathematical shell game.

    When we think of “taxes” we tend to think of the whole bill. That 1.1% savings on the municipal portion is more like 0.25% of the whole bill, right?

    Setting aside the reduction due to tapping the reserves, that’s about $39 of consolidation-related savings on the $748k borough home.

  • Guest

    This demonstrates another aspect to this mathematical shell game.

    When we think of “taxes” we tend to think of the whole bill. That 1.1% savings on the municipal portion is more like 0.25% of the whole bill, right?

    ISetting aside the reduction due to tapping the reserves, that’s about $39 of consolidation-related savings on the $748k borough home.

  • SFB

    There’s been a lot of complaining about brush pickup. I can think of no reason why homeowners with small properties should have more brush pickup than people elsewhere. Sure, they have less space to put yard waste, but they also generate less of it, because they have smaller yards. Consolidation isn’t a game of Borough v Township. We are all working together on the same team.

    $119 off municipal taxes isn’t a ‘tiny’ amount for those of us counting our pennies. (If you think it is, then please give me $119.) It’s quite right that we are precise about measuring the progress so far, but the big savings have still to come. I’m fully behind the consolidation committee’s efforts to look for the greatest possible savings from consolidation. I’d like to thank them for their work and encourage them to take the strongest steps possible to find more consolidation-related savings this year. Be brave! Cut hard and eliminate excess wherever you can!

  • Blake Cash

    “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.”

    Do you not believe that this is a one (Democrat) party town, or that Christie trusts them?

    How about “If you like your current healthcare, you can keep it”?

    Politicians say what they are told to say, they are told what they want to hear. This is news to you?

  • BA

    Who is Christie’s “trusted source, who is in fact a Democrat,” and how do you know this source told him that the savings were $3,000,000?

  • Blake Cash

    Partial agreement. I wouldn’t use the word “appalling”, he’s repeating what he has been told by a trusted source, who is in fact a Democrat.

    Government math has always existed in a universe of its own, The three million dollars was a function of government math, an expense over billed, and now it’s gone.

    Numbers are just scribblings on a page, they don’t really reflect reality.

  • BA

    This article is a fine example of what reporters should do–analyze claims in the news and present the actual facts. It is appalling that people like Governor Christie continue to use the $3 million figure when it has long ago been shown to be false. The true amount of savings due to consolidation–$700,000 total, 1.1% of municipal taxes, or $119 of the average Borough taxpayer’s bill–is tiny.
    Note that $400 is the average amount Township taxpayers will save EVERY YEAR by getting trash pick-up free because of consolidation. Add that to the average of $140 saved by Township taxpayers on municipal taxes in 2013, and the average Township taxpayer saved a total of $540 in 2013. Compare this $540 to only $119 saved by the average Borough taxpayer in 2013. This is a real inequity, caused by consolidation.
    There has been no attempt to correct this inequity. Quite the reverse. The needs of former Borough residents seem to be ignored. For example, brush pick-up is in general more important to homeowners with small properties, like those in the former Borough. This fall, brush pick-up was eliminated. It has only been partially restored, and only because former Borough residents objected to its elimination.

  • krystalknapp

    Only the municipal taxes, as the story says.

  • Townie

    In what alternative Princeton universe is a homeowner with an assessed property value of $826,000.00 paying only $3,800 per annum in taxes? Sign me up. I must have missed the memo. Is this article citing only the portion that goes towards municipal services, and not the public school portion?

  • Guest

    There is still a savings and this is year 1

Events Calendar

« August 2017 » loading...
M T W T F S S
31
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
1
2
3
Mon 21

Johnny Rockets Grand Opening Celebration at the Quaker Bridge Mall

January 1, 1970 @ 11:00 am - August 26, 2017 @ 1:00 pm
Mon 21
Mon 21

Good Grief Volunteer Facilitator Training

August 21 @ 9:30 am - 5:30 pm
Mon 21

Meet the Candidates get-together

August 21 @ 5:00 pm - 6:00 pm

Instagram

  • The book sale at the Princeton Public Library is in full swing. So crowded it's hard to move around. Sale today and tomorrow.#princeton #books

Follow Us

Events Calendar

« August 2017 » loading...
M T W T F S S
31
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
1
2
3
Mon 21

Johnny Rockets Grand Opening Celebration at the Quaker Bridge Mall

January 1, 1970 @ 11:00 am - August 26, 2017 @ 1:00 pm
Mon 21
Mon 21

Good Grief Volunteer Facilitator Training

August 21 @ 9:30 am - 5:30 pm
Mon 21

Meet the Candidates get-together

August 21 @ 5:00 pm - 6:00 pm
%d bloggers like this: