Deep freeze in Mercer

Thursday, December 03, 2009

Erin Duffy
STAFF WRITER

As the state continues to wrestle with mounting budget problems, 11 Mercer County
municipalities have learned that state aid payments totaling more than $2.2 million will be frozen
for the month of December, alarming officials who worry larger cuts may loom ahead.

The move is part of the state government's recent announcement that it would withhold $20.6
million of Consolidated Municipal Property Tax Relief Aid (CMPTRA) for 465 municipalities in an
attempt to stem the state's growing budget deficit.

Both Trenton and Ewing are among the municipalities in the state hardest hit: According to state
data, more than $1.5 million worth of aid payments will be frozen in Trenton and more than
$418,000 worth in Ewing.

In Hamilton, the figure is $136,383, while Lawrence will see $24,380 in withheld payments.

Lisa Ryan, a spokeswoman for the state's Department of Community Affairs, said in an e-mail
that it was important to note that the funds were being currently frozen, not cut.

"They are being withheld right now to give the governor, state treasurer and the executive
branch agencies time to develop a plan for maintaining the constitutionally required balance in
the state budget," she wrote in an e-mail.

"We understand that withholding will negatively affect those towns impacted," she continued.
"But it's also important to note that the total aid being withheld in December represents about
.18 percent of the total municipal revenues."

Local officials said they aren't worried so much about the amounts being withheld, as the larger
implications of such a move for municipal budgets and the taxpayers who help fund them.

"I've been in this business over 30 years and this is the very first time the state has reneged on
what they told us we can anticipate in a current year's budget," said James Pascale, the
administrator for Princeton Township. "You're told you're going to get it, and then on December
1, with one month to go, you're told "oops, sorry we can't afford it.'"

Princeton Township, whose budget operates on a calendar-year basis, will have more than
$5,600 in aid payments frozen for the month of December.

Officials in many municipalities, including Trenton, Hamilton, Lawrence and Ewing, said they
were confident they could scrounge up the money to make up the differences in withheld state
aid.

"We're going to be fine, but I think the concern from my perspective is whether that's going to be
indicative of a trend, and frankly that wouldn't surprise me," said Robert Bruschi, the business
administrator of Princeton Borough, where close to $10,000 in aid payments is being frozen.
Trenton's chief financial officer, Ron Zilinski, said that after reading about the state's budget
problems he had guessed the city's $1.6 million aid payment would be withheld.

The move does not create an immediate problem for Trenton, he said. The city administration
has yet to introduce this year's budget, and its fiscal year does not end until June 2010. Most
municipalities have calendar-year budgets that close on Dec. 31.

"We have some time to deal with it," Zilinski said. "We're ahead of the curve, because we're a
fiscal year town."

Calendar-year towns will have to quickly find out whether the state will allow them to carry a
shortfall into next year, or require them to declare a deficit in their state aid receipts, he said.
Trenton has a few months to figure that out.

"If they withhold the money now and pay us prior to June 30, we're OK," he added. "If they don't
pay it, that presents a problem."

But while acknowledging the state's well-documented financial straits, mayors and business
administrators said they were fearful the decision to freeze funds could usher in a disturbing
precedent of more state aid cuts for many cash-strapped municipalities.

If the state can decide to withhold aid payments, they ask, how can municipalities prepare
themselves for potential state shortfalls when planning budgets?

"It certainly creates a concern that the state potentially intends to address its fiscal problems by
passing on those burdens to local property taxpayers, who are already over-burdened," said
East Windsor Mayor Janice Mironov, whose town is facing $7,419 of withheld payments. "It's a
modest amount, but the more serious issue is the precedent it establishes and the implications
for next year in terms of our state aid."

Ewing Mayor Jack Ball, whose township is currently in the process of assembling its fiscal year
2010 budget, called the state's announcement "$400,000 worth of bad news."

"All in all, Ewing Township needs every penny and dollar we have," he said, noting that the
township was already receiving $314,000 less in state aid than the year before and had been
socked with tax appeals that contributed to a $2.4 million loss in revenue.

"I'm hoping that it's just a temporary situation and that those dollars would still be coming to
Ewing Township, because we're in a bind," Ball said.

Of Mercer County's 13 municipalities, only two were spared from the aid withholdings:
Robbinsville and West Windsor.

Municipal gloom aside, the state has called upon town governments to rein in spending to ease
pressure on taxpayers at a time when revenues are down sharply.

In a State Commission of Investigation report released Tuesday targeting local waste and
excessive expenditure, the commission noted that "At a time of economic distress
unprecedented since the Great Depression -- with government budgets depleted and austerity
the theme of the day even in the private sector -- the gravy train continues to roll without
impediment for select groups of employees on the public payroll."

Mayor Dave Fried of Robbinsville said his township has only received state aid for electrical
receipts, but nothing else.

"I'm in an interesting situation. They cut my state aid two years ago. Other towns are now facing
what I had to face two years ago," Fried said.

Fried said by freezing aid, he believes the state is trying to push municipalities to consolidate,
and he thinks towns should consider entering in more shared service agreements and
consolidate services.

Taking over the township's fire district and Municipal Utilities Authority in 2007, which brought
control of fire and sewer services under the purview of the mayor, has helped reduce costs,
Fried said.

Staff writers Carmen Cusido and Meir Rinde contributed to this report.

Contact Erin Duffy at eduffy@njtimes.com or (609) 989-5723

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