Princeton residents could face municipal tax increase to make up for $2.7 million budget shortfall

The municipality of Princeton is facing a budget shortfall of $2.7 million for 2021. Staff members are looking for areas where the proposed budget could be cut, but taxpayers could see a tax rate increase of up to two percent if savings are not found.

Last year, the municipal tax rate was 49 cents per $100 of assessed property value. The owner of a home assessed at the 2020 town average of $838,562 paid $4,277 in municipal property taxes in addition to school and county taxes last year.

Administrator Marc Dashield said the town is already using $2 million from surplus funds in the budget. The original budget shortfall was $4.7 million, he said. Town officials don’t want to use more surplus because the town will be borrowing lots of money to build affordable housing projects in the near future, and officials are concerned about maintaining the town’s strong bond rating.

Councilwoman Michelle Pirone Lambros noted that there was no tax increase last year due to the pandemic. “We’d like to do same this year, but it is going to be really hard to achieve,” she said, adding that officials are looking at everything in the overall budget, as well as looking to see if there are any properties in town that can be sold. “We need to put everything on the table and look at everything in this exceptional year,” she said, noting that town revenues are down in several areas due to the pandemic, including parking revenue, inspections, municipal court fees, and licensing. Officials hope revenues will be back to normal levels once the pandemic is over.

Lambros said officials are talking to community partners to see if they have any funding sources or ways to offset budget items. She said it isn’t unusual for the town to increase taxes two ot three percent, but the tax rate was frozen last year due to COVID-19. She said officials should “leave no stone unturned” to find money to fill the budget gap, and said the town owns two single-family homes on Clearview Avenue that could be sold for a total of $1.4 or $1.5 million to help decrease the budget gap. The town acquired the homes as part of a property swap with the Princeton First Aid and Rescue Squad. The town also owns the former Princeton First Aid and Rescue Squad property on Harrison Street. This winter, the property has been used as a staging site for snowplows, vehicles, and other equipment.

Some governing body members did not like the idea of selling the two single-family home properties.

“Once those properties are gone, we don’t get them back,” Councilwoman Eve Niedergang said. “There is a limited amount of real estate in Princeton. It’s hard for me to let those properties go without knowing what the big picture look like in terms of what other uses there are. Once they are gone, that’s it. There is no way of getting them back.I hate to rush into something. We might have some other unanticipated needs for them.”

Councilman David Cohen said at the time of the property swap, the former council envisioned the property exchange a way to cover municipal expenses related to the new Princeton First Aid and Rescue Squad site. “Obviously we are not bound by that. It doesn’t exist anywhere in an ordinance or anything like that,” Cohen said. “When the council exchanged the current location, it was envisioning liquidating those properties, and also the former PFARS site itself.” 

Mayor Mark Freda said there was no consensus on the former council about how to use the Clearview properties, and that some officials thought the sites could be used for affordable housing at the time. “Obviously the affordable housing landscaping has changed quite a bit,” Freda said. “To reinforce what eve said though, when a municipality owns a property, you should do all you can to never get rid of that property. You never know what a future use is. Without knowing the big picture, I don’t know that it’s worth it to try to make a short-term gain on it right now.”

Council President Leticia Fraga said some wording in the memorandum of understanding for the properties said they would be used for public purposes to benefit the community. She then asked how the PFARS building is being used. “The building is not being used at all right now,” she said.

The memorandum of understanding stated that the town could use the properties for public purposes to benefit the health, safety, and welfare of the community of the financial needs of the community.

Lambros said she agreed in theory that the town should be cautious about moving forward with the sale of any properties, but added that the Clearview properties are a single-family home scenario and that given the neighborhood’s character and lack of parking, they would not have the same public use.

Councilwoman Mia Sacks said the properties are in a redevelopment zone and won’t statically remain what they are.

Niedergang asked if police hiring could be slowed. Sandy Webb, chief financial officer for the town, said that is already being considered. There are five vacancies in the police department right now, and the police department is looking at pushing back the hiring date for three positions to just before the summer, and pushing back filling two positions in the fall.

Officials said they are optimistic that town revenues, such as parking revenue, will pick back up once the pandemic is over.

Niedergng said she is confident that town officials will continue to look for whatever kinds of savings or delayings of expenses they can find.

“Our attitude has to be that nothing is sacred, nothing is off the table. But given all of that, I have to respect the advice our professionals are giving us and as much as I would love to say taxes need to stay flat, that’s clearly not possible,” Niedergang said. “If you (staff) think two percent is where we are, this pains me to say it, but I don’t see a feasible alternative at this point. We will work our hardest to move that number down from two percent, but if that’s what it has to be, I can accept that.” 


    1. Affordable housing is mandated by court order, not building it is not an option.

      I say the University should step up & help out.

  1. If nothing is sacred, how about just don’t fill two police positions, period? Merely pushing back filling them until just before summer (right around the corner), or til next fall is a drop in the bucket of the budget gap we need to fill. Ms Webb did not focus on the police line item in the preliminary budget she displayed, but it is clearly the Town’s largest expenditure by a wide margin. And I did notice that at this point it is slated to grow in the coming fiscal year.

  2. David is correct re the Clearview properties. My understanding was that we acquired the properties to provide liquidity for PFARS for their new facility, and that once the old facility was vacated, we would evaluate whether the three properties had greater value as a package. In any case, the goal was to sell them to either pay off the debt assumed to acquire them or restore cash balances. If the current governing body wants to do something different, i would like to see where owning a couple of bungalows ranks in terms of town priorities. They aren’t free.

  3. Princeton should not be in the real estate business. If there’s no clear municipal use for the properties, they should be sold — if only to a non-profit organization, if that is what the town wants to do.

    And while recognizing the crucial role our police officers provide us, we should also seriously consider downsizing the number of police in this tough budget time. Princeton is over-staffed policewise and it makes good public policy not to dedicate so many resources in this area unless it is clearly needed. Every time we have an out-of-town guest visit, they notice the number of police cars around town and ask if we have a crime problem. Princeton doesn’t have a crime problem, and we still wouldn’t if we had a few less police officers. If we are having a budget issue, let’s consider not filling those positions permanently until it’s absolutely needed. Everyone has had to tighten their belts this past year and the town needs to do it as well. And this would be a progressive policy action.

  4. Former Council member here… as Jo Butler says, the agreement to buy the PFARS properties was compelled by the funding needs of PFARS, with the understanding that taxpayers were not contributing the amount but lending it. PFARS has admirably and reliably paid for the new building with little help from the town; an enormous benefit to taxpayers. (PFARS is wonderful! Thank you PFARS!) The current council is of course not bound by the plan to recoup their expenses, obviously. However, with a budget shortfall, it seems incongruous to be lamenting the possibility of raising taxes while dreaming up uses for these properties instead of selling them.

    On another note, Clearview is a pretty, relatively modest neighborhood street. Changing the use of the homes for other than residences would significantly alter the cohesion and life of that street and in my opinion it would be a shame.

  5. Not only will this impact residents, but this will also impact businesses in town as they pay the property taxes for the portion of the building rented. Not a good time for more increases. We have all had to find ways to reprioritize spending, improve efficiencies & reduce costs to get through budget shortfalls this year.

  6. Yes, that was the promise! But now it’s the same song and we only have once a week garbage pick up and still higher Taxes.

  7. Well just maybe if they didn’t grossly overpay their cops they wouldn’t have this situation!

  8. Princeton is getting over $6 million in new stimulus money in the next 30 days. Those funds are intended to offset shortfalls like this one

  9. Thinking back to last week, watching four men staring up at the one man in the bucket truck cutting limbs on Witherspoon Street and leaving the street in a disarray of sawdust and small debris on top of the already trashy street. There’s four salaries to be saved. All of the shuttered PFAR buildings that should be sold. The old Borough Hall, now a large wasted space that should be sold. As noted, the incoming stimulus money. I could go a lot of places before I need to get to eliminating police.

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