Tax rate may remain stable

[Cranbury Press]

Tax rate may remain stable
Thursday, March 5, 2009 2:34 PM EST
By Maria Prato-Gaines, Staff Writer




CRANBURY — If the Township Committee approves the $12.16 million budget it introduced Monday, it may have accomplished what some thought was the impossible — stabilizing the tax rate.

The township introduced a budget that is slightly less than last year’s $12.4 million spending plan and calls for a tax rate of 37.2 cents per $100 of assessed valuation. Under that tax rate, the owner of a home assessed at the township of $668,000 can expect to pay about $2,485 in municipal taxes this year, the same as the previous year.

This year’s budgeting process was no easy task for local officials, who spent days and hours pouring over the numbers, said Denise Marabello, the township’s chief financial officer.

While the township ended 2008 with a $339,567 capital fund (surplus) balance, it expects to have $81,400 in surplus by the end of the year.

This year, revenue and appropriations would total 11,345,186.83 each while the amount of revenue to be raised from local taxes would be $6,496,322.24.
Ms. Marabello said several factors contributed to the decrease, including the township’s efforts to pay its debt as well as the lack of property sales by the municipality, which had boosted that number in the past.

Although municipal court costs would increase by more than $68,000, Ms. Marabello said this number really doesn’t have much of an impact as it reflects an accounting procedure. Plainsboro, which has an interlocal agreement with Cranbury to handle its court proceedings, transfers money accrued during those proceedings to the township, which in turn, returns those funds to this neighboring municipality.

As for state aid, township officials are projecting to receive about $2,000 less, $635,576.50, this year.

On the spending side, salaries and wages would increase in some instances and decrease in others. Some of these changes can be attributed to township officials juggling jobs between various budgets and departments, Ms. Marabello said.

Overall, salary and wages would increase to $3,146,677 from last year’s $3,112,372.

With the police salary and wages, recent promotions and contract negotiations have left officials projecting a increase of $2,032,104 from last year’s $1,968,421.

Committee members also shaved tax collection salary and wages after making the position part time.

Public Works salary and wages also would drop from $219,835 to $180,294 this year, but with a good explanation, Ms. Marabello said.

”We pulled a couple of items out of Public Works and put them into the interlocal (agreement) budget,” she said.

The Public Employees Retirement System spending would jump from $91,630 to $117,790, but those numbers are generated and mandated by the state, Ms. Marabello said.

Looking at the Fire Company budget, it would appear the organization lost $55,000 and could receive $35,000 in 2009, however, those numbers can be deceiving, according to township officials. The township actually transferred $55,000 into the fire official’s budget, which would be used for the same purposes as was in the company’s budget, said Christine Smeltzer township administrator.

”It’s basically just moving the money around,” she said.

Interlocal municipal service agreements would increase by approximately $300,000 to $955,139 in 2009, according to the spending plan.

Not only has the township added interlocal agreements for such services as distribution of rock salt, but one major component of the increase would be an excluded fee to the Monroe Township Utilities Authority, which is expected to be in the range of $170,000 and was categorized under sewer expenses in previous years, Ms. Marabello said.

Minor changes would occur with the capital improvement fund, which would decrease from $60,000 last year to $50,000 in 2009.
As for the municipal debt service, that number would decrease from $3.42 million to $1.81 million.

”We used the sale from notes to pay down more of the principal last year,” Ms. Marabello said.

All in all, township officials are pleased with what their hard work has accomplished during this year’s budget season.

”They’ve worked hard, page by page and item by item, to keep all expenses down as low as they could, and the result is that they came up with a budget that doesn’t have an increase,” Ms. Smeltzer said.

http://www.centraljersey.com/articles/2009/03/07/cranbury_press/news/doc49b027f295c19961605441.txt

[Guest]

How could we passing a budget that is not balanced? If the township expects to bring in 11.35 million and then approved a budget of 12.16 million; this means the budget isn't balanced and we have to dip into our surplus or raise taxes. This is a huge shortfall. That means Cranbury is overspending by approx. 7%.

I sure hope the TC will come up with a better solution. I still see areas that could be cut from the budget.

[Frugality in Cranbury]

[The Times]

County layoffs likely to close big budget gap
Friday, March 06, 2009
BY CARMEN CUSIDO

Between 75 and 125 employees -- 6 percent of Mercer County's work force of 1,900 people -- could be laid off over the next three months to help close an anticipated $43 million budget gap, County Executive Brian Hughes said yesterday, dropping a bombshell on the workers under his command.

The layoff announcement follows a disclosure last week that the county is facing red ink over the next two years because of the economic downturn and higher operating costs, and that every possible cost saving measure would be considered.

............................

http://www.nj.com/news/times/regional/index.ssf?/base/news-16/123631593188790.xml&coll=5

[Assoc Press]

http://www.msnbc.msn.com/id/29584491/

In cubicles, factories and stores these days, anxious workers are trying to ease each other’s economic fears with something akin to, “Well, at least we still have a job.”

Yet for many, that’s becoming small comfort as more employers cut hours or hire only part-timers. People paid on commission, meanwhile, are suffering as sales dry up. And state workers around the country have been put on unpaid leaves.

These workers aren’t counted in the unemployment rate, which hit 8.1 percent in February. They’re not eligible for federal benefits that provide a safety net for the jobless. Yet their pain is real, and their reduced spending is a drag on the economy.

Story continues below ↓
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Call them the walking wounded of this deep recession: millions of workers whose incomes have fallen even as they manage to hold onto their jobs. Their shrunken pay has forced many of them to make hurtful sacrifices.

“I won’t be able to buy to the groceries I need to buy to make sure my family can eat until the end of the month,” said Rhonda Wagner, a 52-year-old California state employee who just absorbed a 9 percent pay cut because of a state-imposed unpaid leave.

Before her pay cut, Wagner said her paycheck from the Department of Motor Vehicles was barely enough for her to pay her bills. Now, she says she’s facing foreclosure and struggling to pay for utilities.

“I will have to rob Peter to pay Paul,” she said. “We’re expected to work, even though we’re not getting paid.”

More than 4.5 million workers last year depended at least partly on variable pay, which includes tips and commissions, according to Labor Department figures. Meanwhile, the number of workers forced into part-time instead of full-time work soared 76 percent in the past year.

The average number of hours all employees work each week has also dropped. The commission-heavy sectors of retail and auto sales have been especially hammered.

That said, workers whose hours or commissions have dropped have still fared better than those who have lost jobs altogether. Even though workers are being given fewer hours to work, average hourly wages have continued to rise over the past year.

Still, many of those who keep their jobs tend to suffer during recessions right along with the unemployed, said Edward Lazear, professor of human resources management at Stanford University and former chairman of President George Bush’s Council of Economic Advisers.

As the recession cuts demand for goods and services, companies that don’t shed workers outright must squeeze savings from the work force that remains. They typically do so by cutting hours. And as a recession persists, rising competition for jobs tends to shave wages and benefits. Companies lose any incentive to boost pay.

“Other guys are now competing with you for that job, and they’re willing to take that same job for less money,” Lazear said. “While it might not happen in any given month, over the next three years, wage growth will be lower than it would have been had we not had a recession.”

When companies cut or freeze wages for salaried or hourly employees, the workers tends to feel the effect gradually. By contrast, for waitresses, car salesmen, retail clerks and others whose variable pay hinges on economic cycles, a pay drop tends to be as steep as it is quick, said Sylvia Allegretto, an economist at the University of California, Berkeley. That’s because sales-based compensation is more sensitive to swings in consumer spending.

“They’re going to be hard hit, because tips, commissions, overtime and all those things, along with hours, are going to be cut,” as the economy struggles, Allegretto said.

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The effect is hard to quantify because the Labor Department doesn’t track pay for this group of workers as a whole, she said. But for many, the pain has been quick and deep.

Until last year, 58-year-old Michael Klein made about $125,000 a year selling Hummer SUVs at a dealership in Concord, Calif., near San Francisco. With 20 years’ experience, Klein was accustomed to moving 15 to 25 vehicles a month. Then gas prices soared and loans dried up. So did his client base.

[Guest]

The problem is that if you look at the bottom line for a lot of these companies the stock and earnings are fine. What is happening is that companies see the opportunity at this time to realign and reduce staff costs. They see the media going nuts over recession, they see that wages are being cut and the company's shares don't fall, so they say now is the time. We can hold wages or cut them and the market will simply say and do nothing. It's actually the greed at the senior level looking to increase earnings, supported by a media that is causing the hysteria right now. Unfortunately, it ends up being a self sustaining issue. The news organizations do stories causing panic, companies see a ready built excuse, so people are laid off or have wage cuts, and then we have more people hurt.

A prime example is the NFL. Teams are laying off staff and cutting wages, yet turn around and give one person a 50 million dollar contract.

Citibank is doing the same, yet pays 400million for stadium naming rights this year.

My own company had a record year in 2008, but froze wages.

[Guest]

I think that overly simplistic.

First, Citi is a terrible example. They are nearly bankrupt and on substantial government aid. They didn't pay $400M for naming rights this year -- they signed a deal several years ago that costs $400M over 20 years, and less than $20M this year. They wanted were already under contract (it was set a couple years ago) and the Treasury Department, at the request of Congress specifically, asked them not to try and get out of it (since the stadium itself generates jobs, Congress thought it was a bad precedent).

I agree, some companies are definitely trying to take advantage of the recession/depression to cut staffing. But many others are either already aware of a radical shift in Q1 performance or are planning ahead because they can see the impact on the rest of their year and the best way to avoid getting slammed is the adjust before its too late. My company had a good year in 2008 too, but will have a terrible Q1.

You also have to clarify what you mean by solid fundamentals. Many companies have debt and for those that have debt maturing, they have serious issues because it is often impossible to restructure it or if they do so it is on egregious terms right now. Overall, the idea of cutting spending is something shareholders, and therefore the market, should be applauding. That said, yes, some are abusing it…

[Guest]

Just because your company had a good year in 2008 does not mean it will in 2009. This is a new year and a new economy. You must be working at a company that plans on staying around. I'm sure if you look at your companies 2009 forcast you would understand their decisions.

[Guest]

The problem is forecasting and hype. If you read any of the major economists writings or even Krugman they all talk about recessions being self feeding. Yes, it's true that companies are looking forward, but the problem is that all of them looking forward and doing the reactionary things causes the recessions to feed on themselves.

[Guest]

[Guest]

I agree that we will work through this recession as we have many times before. However, there is this time a great unknown which is the “stimulus” and the upcoming budget deficits which are unprecedented. This is not the time for "experiments" (the Presidents words) with our great country. The government is sticking its nose into so many places that it doesn’t belong that it will thwart the individual acts of millions of citizens trying to make independent decisions about what is best for them. Now as in the 1930s, the things the government is doing will only delay the recovery. I don’t trust the Congress and the President to make decisions that belong in the private sector. Their heavy hand will crush any spark of iniative that individuals create.

[Guest]

[Guest]

It's too difficult to have an economic discussion on this board and speak in dpth around all the issues surrounding the self feeding nature of recessions. It has nothing to do with market timing or selling short. It has everything to do with corporate management approaches and how they approach their finances going into a recession.

[Guest]

Guest wrote

"Mean while the actuarial economist are using historical analysis and most (including Obama administration) have stated that this recession/depression will be at least 2yrs or more (even with the stimulus)."


They may be saying that but the mis-named "New Era of Responsibility" Obama FY 2010 budget makes the following GDP year over year growth assumptions. (In %)

FY 2008 1.3% (actual)
FY 2009 -1.2%
FY 2010 3.2%
FY 2011 4.0%
FY 2012 4.6%

(page 132 of budget)

These wildly optimistic assumptions are being used to disguise the real size of the deficits Obama is planning.

[Guest]

One way or the other we are being scammed. If the assumptions are really intended to disguise the deficits then the scam is in lying to us about the debt that is being laid on us and our kids and grandkids. If the assumptions are really what Obama expects to happen then he is lying about the need for stimulus and is using the recession to cynically promote basic redoing of our economy in a way that has nothing to do with economics and everything to do with the government and the people in government having power over all our lives. There is no ecsaping that we are being lied to in the biggest game ever played.