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.”