With budget shortfall, Borough must cut jobs, raise taxes

In response to a recently announced $1.3 million 2009 budget shortfall, Princeton Borough will likely cut jobs and raise taxes and fees in the upcoming year, Borough Administrator Robert Bruschi said.

“We have to come up with $1.3 million and have to live within the state budget guidelines … We’ve cut the expenses we can cut, so all that is left is to cut jobs,” he said, noting that the Borough is under a number of constraints. “The governing body wants a budget with no increases in salaries overall, but because of unions, the salaries would go up,” he explained.

According to a Times of Trenton report, Bruschi’s recommendations to the Borough Council include downsizing the police department as well as laying off an administrative assistant and two public works department employees.

Tax hikes will also likely be part of the Borough’s efforts. “I do not believe that [not raising taxes] is an attainable goal,” Bruschi said. “We would have to cut significant other jobs to deliver a budget with no tax [increases] overall, and no one is in a position to say that is feasible.”

Borough Councilman Andrew Koontz noted that the increases will hit both property taxes and fees for Borough services, such as parking. The Borough is currently in the 98th percentile among New Jersey municipalities for property taxes, according to The Newark Star-Ledger.

Councilman Roger Martindell said that the Borough could explore other solutions to the budget shortfall.

“This year offers a unique opportunity to turn the tide and seek alternative solutions, such as reducing services and increased consolidation of services with the Township,” he said in an e-mail.

In addition to being hit by the economic downturn, the Borough has suffered a number of financial setbacks.

Because of a state mistake in hotel tax revenues, the Borough has lost $380,000 in revenue this year.

The state had been giving the Borough all the hotel revenues incurred by the 08540 area code, which also covers parts of neighboring West Windsor and Lawrence, Koontz explained.

“We were being given a bit of hotel tax that was not ours, and we did not know that. Eventually, [the state] figured out what happened,” Koontz said. As a result, the Borough is not receiving any hotel tax payment this year.

Bruschi also said that building permit and construction revenue was lower than expected in 2008.

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In addition, Koontz noted a reduction in state aid as a factor in the budget shortage.

In 2008, New Jersey’s unemployment rate rose from 4.5 percent to 6.1 percent, according to an Associated Press report. Furthermore, state revenues were more than $400 million below the expected level in November and December.

The announced expectation of employment cuts was softened by the fact that the police department’s cuts will be handled through attrition. In recent months, the Borough Police has had three officers face disciplinary action, and the Council expects that “a number of the resignations will be coming from [the police department],” Koontz said.

Koontz noted that one of the officers facing disciplinary action, William Perez, recently resigned. Officer Kenneth Riley has been indicted, he said. The case of the third, Kevin Creegan, is still being investigated, and no indictment has been handed down.

Martindell has attempted to speed up the resolution of the turmoil in recent Borough Council meetings.

“Last year the Borough spent over a quarter of a million dollars to pay 10 percent of its police force to stay home while suspended,” he said, noting that “[t]he more costly the Borough’s police compensation, the more difficult it will be to avoid raising taxes or avoiding cut backs in services in other areas. Every suspended police officer we pay, generally at the rate of over $100,000 per year, represents $40 per Borough household [on average].”

Martindell also suggested that the Borough re-evaluate its assumptions about the force, including whether consolidation with Township Police would be efficient.