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Eliot Spitzer
Supporter
Username: Doublea
Post Number: 1008
Registered: 3-2003
| | Posted on Sunday, April 17, 2005 - 10:39 pm: | 
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In another thread, there is a discussion about Montclair's zero percent tax increase in municipal taxes for the coming year. The Star Ledger article says that this is due to the large amount of remodeling and new construction resulting from tear downs.
In South Orange, we've had Gaslight Commons built, and the Quarry development coming on stream as well as the now approved redevelopments in the Village Center. And yet the projections show a 5% annual increase in municipal taxes in the future.
For 2006, it has been stated that the municipal tax increase will probably be about 4.5%. I've asked, and really didn't expect an answer, how we've allowed a 4.5% tax increase to be accepted as the norm. And I've also asked if we do receive extraordinary aid from the state, will the tax increase still be 4.5%?
If we don't receive anything from the state, what will the increase be? If we receive $50,000, what will the increase be? If we receive $100,000, what will the increase be? I suspect the answer to all these scenarios is 4.5%.
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MHD
Citizen
Username: Mayhewdrive
Post Number: 2108
Registered: 5-2001
| | Posted on Monday, April 18, 2005 - 8:04 am: |
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Doublea,
I agree and it is very unfortunate. However, as long as Trustee Rosen continues to continue to spread scare tactics such as "with wages and salaries going up by 4% it is necessary to pass this ordibabce or cut positions and services considerably." and as long as Steglitz & Theroux & Taylor are more concerned with lining their pockets with pensions & the pockets of the Administration with permanent jobs, I'm afraid this will only continue. |
Eliot Spitzer
Supporter
Username: Doublea
Post Number: 1009
Registered: 3-2003
| | Posted on Monday, April 18, 2005 - 8:50 am: |
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I've not been able to ascertain who really sets the tax increase number. I recall a year ago when John Gross said we could be facing a 20% increase in 2005 taxes, there was a big discussion at the BOT meeting.
I think what happens is that the BOT tells John what increase will be acceptable, and John works to that number.
A year ago I did attend a CBAC meeting to try to learn a little about how the budget and tax increase is arrived at. This was at the time when a worst case scenario of 20% had been mentioned, and the phrase "crisis" was being used.
Lo and behold, there was no longer a crisis. Additionally, John said that most people in South Orange were satisfied with the taxes. They were used to a "high level of services."
When I tell people what the taxes in South Orange are, they say what are you getting for that. Unlike Millburn and Montclair, which provide garbage pick-up, we pay for trash services. We have once a month recycling. The lack of bulk pick up has been mentioned at length (and I realize arrangements can be made with DPW to pick up larger items).
Woodstock and Susan have confirmed it above - the high taxes in South Orange are a direct factor in decreasing house prices in South Orange. |
susan1014
Supporter
Username: Susan1014
Post Number: 536
Registered: 3-2002
| | Posted on Monday, April 18, 2005 - 9:25 am: |
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Eliot, you misquote me somewhat...I said that the high taxes contribute to a ongoing difference in house prices between South Orange and Millburn/Short Hills.
It was true 10 years ago, it is true now, but my house has doubled in value (at least) in the presence of this difference. The cost of ownership equation is different for the two towns -- in Millburn you pay more upfront, and less down the line relative to South Orange.
Short Hills can pull this off in part because of the luck of geography...they could put in huge ratables at the Short Hills mall, adjacent to a freeway exit and far from the homes of most other taxpayers. I don't think we have anyplace where we can do the same.
If house prices are decreasing here in town, I haven't seen it yet. However, rising housing prices are not a given. When we bought in 1996, we were buying at the end of a 10 year period of stagnant housing prices. The people we bought from sold for almost exactly what they paid for the house, after 5 years of ownership and thousands of dollars of renovations. Midtown Direct has done wonders for our property values, and I fully expect the runaway house values to cool someday (to some extent I consider the appreciation "funny money"), and be followed by another period of slow/no growth, but I blame it less on our taxes than on the unsustainable rate of growth seen in the area in recent years. |
Eliot Spitzer
Supporter
Username: Doublea
Post Number: 1010
Registered: 3-2003
| | Posted on Monday, April 18, 2005 - 9:59 am: |
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Susan - Sorry to misquote you somewhat. I'm pretty familiar with the history of housing prices in South Orange and the historical comparisons with Millburn/Short Hills and Livingston.
You were fortuante in your timing - prices probably started to take off in the second half of 1997. I do think that every day the residents of South Orange should turn in the direction of the N.J. Transit headquarters and give thanks.
With the prime midtown direct commute and the beautiful housing stock, houses in South Orange still don't command the kind of prices they should. No doubt prices have increased dramatically, but so have other towns. South Orange was probably working from a lower base.
As you have suggested in your post above, many potential homebuyers are looking at their monthly carrying costs as well as the down payment. The upfront cost, even with the taxes, is lower in South Orange because the cost of housing is less. I do think it's partly due to the taxes.
I still think it's a valid question of the BOT (and the new members) whether an annual tax increase of 4.5% should be acceptable as the norm.
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susan1014
Supporter
Username: Susan1014
Post Number: 537
Registered: 3-2002
| | Posted on Monday, April 18, 2005 - 11:04 am: |
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Eliot, agreed, both on the the validity of questioning increases beyond inflation and on debt of gratitude we owe to NJT for our appreciation (we were indeed very lucky in the timing of our move, and were among the first to move here in part because of the impending launch of Midtown Direct) |
woodstock
Supporter
Username: Woodstock
Post Number: 967
Registered: 9-2002
| | Posted on Monday, April 18, 2005 - 1:52 pm: |
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To be more clear, part of the reason my home was priced where it was was not just the tax rate in South Orange vs Livingston, but the disproportionate share of South Orange's budget that I pay. This is a long standing issue for me, doublea, and a few other residents. I posted a while ago that when we first thought about selling our house almost two years ago, we were told by more than one realtor that they weren't even showing our house because of the taxes.
As far as the budget, What I say below, I say with absolutely no knowledge of the budget process that South orange goes through:
I can't understand why the rate is set at all. The budget should be set, then the rate determined from there. I always assumed that this was the case. Is the implication that the BOT (or Mr. Gross) believes there is an "acceptable" number that will not generate too much backlash? Or is it simply a case of determining that number, and realizing that the citizens would not swallow it, so they find a way to reduce it to a more acceptable number?
(does that paragraph even make sense?)
Finally, MHD, yes we've sold our house. We've bought another (well, it will all happen in about 6 weeks). We're moving out of the county to Springfield. Not as "cute" a town, but our taxes are being cut in half. Actually, just over half. Scary... And we're still close enough to enjoy the things that South Orange and Maplewood have to offer. |
Eliot Spitzer
Supporter
Username: Doublea
Post Number: 1012
Registered: 3-2003
| | Posted on Monday, April 18, 2005 - 9:02 pm: |
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I was watching the BOT meeting this evening where the DMC was making its presentation. In the course of the discussion, Allan Rosen brought up the fact that the costs of the DMC in 2006 were going to be in the neighborhood of $300,000 - 400,000, which adds approximately 3% to the budget, taking the tax increase up to 7%+.
I assume this increase is above the budget cap and not an item considered outside cap. Does this mean that the increase above statutory limits has to be approved by the voters in the fall?
As an additional question, if in fact the increase is approved by the voters, is the total then included in the base for purpose of determing the cap in the following year?
Perhaps Allan can answer these questions? Thank you.
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MHD
Citizen
Username: Mayhewdrive
Post Number: 2115
Registered: 5-2001
| | Posted on Monday, April 18, 2005 - 10:44 pm: |
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Doublea,
By the time I turned on the TV, it was no longer on. What happened? Did a vote take place?
Funny how when it came time to subsidize the Quarry developer with $1.2 million, there was no problem coming up with money. When the Village purchased Shop Rite, there was no problem coming up with the money.
Now for something that could finally HELP the Village & we can't afford it? I recall Eric DeVaris (& I think other candidates) had viable proposals for paying for the DRMC without impacting our taxes. It really is time for some new & creative thinkers on the Board. |
Eliot Spitzer
Supporter
Username: Doublea
Post Number: 1013
Registered: 3-2003
| | Posted on Tuesday, April 19, 2005 - 7:34 am: |
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No vote took place last night. The funding issue, which had been put off until last night, was finally discussed, or at least mentioned. No alternatives were offered other than a tax increase.
My question is, if this is the case, is a vote required on the amount the tax increase exceeds the statutory limitations.
If Eric or others can offer alternatives, I'm sure we would all be interested. None were offered last night.
MHD - The Quarry and Shop Rite money came from bonding, I believe. The DMC money will be operating expenses, and can't be bonded. The budget caps add something new to think about.
I'm just asking Allan whether my understanding is correct. He can't be blamed for the new budget law cap. I think Allan has been a supporter of the
DMC all along. He's just asking the questions that have to be asked.
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MHD
Citizen
Username: Mayhewdrive
Post Number: 2116
Registered: 5-2001
| | Posted on Tuesday, April 19, 2005 - 7:46 am: |
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Thanks, Doublea.
Actually, the money to subsidize the Quarry came from a "water surplus" fund.
Maybe a better example is SOPAC, which is expected to run a deficit of several hundred thousand per year. Calabrese has said he would spend whatever it takes.
I think a DRMC is money much better spent.
Edited to Add: I just remembered that Eric's proposal was for the elimination of John Gross's monopoly on South Orange Finances, not necessarily for the DRMC. Sorry for the confusion. |
Eliot Spitzer
Supporter
Username: Doublea
Post Number: 1014
Registered: 3-2003
| | Posted on Tuesday, April 19, 2005 - 8:02 am: |
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My posts should be corrected - it is the spending which is limited by budget caps, not the tax increase. The question still remains - will this addtional spending be above the permitted cap and thus require voter approval.
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Allan J Rosen
Citizen
Username: Allanrosen
Post Number: 159
Registered: 4-2003
| | Posted on Tuesday, April 19, 2005 - 10:20 am: |
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Woodstock: You are correct. When the BoT reviews the potential budget. it first figures what the expenses have to be. From that results the tax setting and increase (or--gasp--decrease).(While I was serving as Finance Chair in the late 70's we actually had a municipal decrease so large that the entire tax bill showed a decrease!) The 4 1/2% roughly increase results from the fact that wages are rising at roughly 4& because state mediators are driving settlements in the 4-4 1/4% range despite cap laws and some expenses such as health insurance and public safety pensions (due to the Whitman games)(now increasing at a rate of about $160-200,000. per year). This is set for another couple of years. It is my hope that the Village will elect Trustees who will see the necessity for stabilizing the tas rate, for keeping costs down, and for making choices so that if they wish to consider new expenses they will at least make countervailing cuts in other areas.
ES: Re the DRMC--if costs are within caps, it would necessitate making other costs. The first year expenditures were circa $100,000. The full hit would occur in 2006. Part of the cost could come from reallocating the $30,000. normally going to Main Street which would be absorbed into the new entity. The DRMC committee is going to submit a revised set of recommendations to the BoT so that we can pass a resolution no later than May 9 (if not April 25). I favor the DRMC and hope that we can bring the cost/benefit relationship into line. |
bets
Supporter
Username: Bets
Post Number: 1142
Registered: 6-2001
| | Posted on Wednesday, April 20, 2005 - 12:52 am: |
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quote:(While I was serving as Finance Chair in the late 70's we actually had a municipal decrease so large that the entire tax bill showed a decrease!)
Shocking! Who were the board members then (Spiotta, Kroll, etc.?) |
bets
Supporter
Username: Bets
Post Number: 1143
Registered: 6-2001
| | Posted on Wednesday, April 20, 2005 - 12:55 am: |
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Allan,
Not to nitpick, but wasn't the downtown thriving at that time? There was a veritable boom in small business operations, was there not?
How would you compare what was successful then to what is so lacking now? |
Allan J Rosen
Citizen
Username: Allanrosen
Post Number: 160
Registered: 4-2003
| | Posted on Wednesday, April 20, 2005 - 4:49 pm: |
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Bets: The difference back then was that starting in 1977 the new Board was willing to go after CDBG monies and Green Acres grants (the previous Board was afraid that accepting such monies would attract "people" from Newark). That enabled us to reduce contributions to the Capital fund considerably. We also cut a lot of "fat" out of the budget. And again we were helped because in those days if a house turned over for considerably above the actualized assessment it could be partially reassessed. All these factors resulted in a 10% reduction in the municipal budget which outweighed the increases in the educational and county portions. The reduction in the tax bill was approximately 1%.
If the new ratables from the quarry, ShopRite, and Beifus projects were all to come on in the same year, it's quite possible that there would be a municipal tax decrease that year. The three projects should bring in approximately $1.5 million dollars in municipal revenues. |
Eliot Spitzer
Supporter
Username: Doublea
Post Number: 1016
Registered: 3-2003
| | Posted on Wednesday, April 20, 2005 - 7:24 pm: |
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Allan - My recollection of the philosophy behind the budget for the last 7-8 years is as follows.
Up till about 7 years ago, there was no pre-determined benchmark for a tax increase, other than to try to keep the annual increase as small as possible. In some years there was in fact no increase.
About 7-8 years ago, there was a tax increase of about 10-11%. In the following year, it was decided that it would be better to even out the increases so that there would not be a big hit in any particular year. It was therefore decided that the target would be an annual increase of 1.5%.
This target of 1.5% really didn't last long and a new target of 4.5% was arrived at.
Perhaps it's time to review this philosophy. I realize that you mention the 4% increases awarded by state mediators, but this has been recently (I think). Even before that we were working with a target of 4.5%.
Your post yesterday at 10:20 a.m. was refreshing in that you said you are hopeful that the future BOT will recognize the need to make choices. This probably is something that hasn't been done for a while now.
I recognize that at present, our revenue growth doesn't match our expenditure growth. As you point out, the quarry development, Beifus and Shoprite should help.
Maybe in the future, we should aim to keep the increase as low as possible, without any built-in 4.5% increase in the budget number. Other towns this year, even with the new budget caps, have been able to keep their tax increases to less than that permitted under the cap; in some cases, and it's more than Montclair, there have been no increases.
I know that most of the candidates as well the remaining members of the BOT read this board. I hopeful that they will consider what I've said.
The cases run by John Gross for the Shoprite and Beifus Pilot presentations show an annual increase of 5%. These numbers are truly staggering, and I just don't see how they can be sustained.
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bets
Supporter
Username: Bets
Post Number: 1158
Registered: 6-2001
| | Posted on Thursday, April 21, 2005 - 1:21 am: |
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I doubt that taxpayers will ever see a decrease in taxes, especially with a revaluation looming on the horizon. The current Board of Trustees is just plain fiscally irresponsible. That's the truth of the matter. Whether new blood can save us from the ineptitude infecting this town by the incumbent board remains to be seen. But change is clearly, clearly necessary. And we all, ALL, deserve the chance for change.
DO NOT VOTE LINE C! THEY'RE NOT EVEN RIGHT ABOUT WHERE TO VOTE ON ELECTION DAY! HOW DO YOU THINK THEY'LL DO WITH GETTING ANY PROGRESS DOWNTOWN? |
Allan J Rosen
Citizen
Username: Allanrosen
Post Number: 161
Registered: 4-2003
| | Posted on Thursday, April 21, 2005 - 11:17 am: |
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Whatever the other problems associated with them, revaluations are revenue neutral and do not result in overall tax increases or decreases (aside from the necessity to pay for the revaluation itself, normally around $250,000). |
Eliot Spitzer
Supporter
Username: Doublea
Post Number: 1019
Registered: 3-2003
| | Posted on Thursday, April 21, 2005 - 1:11 pm: |
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Allan - Just a note. I've seen some municipalities bond for the reval and related appeal costs, and have spread the costs over five years. I trust we will do the same. |
Soda
Supporter
Username: Soda
Post Number: 2946
Registered: 5-2001
| | Posted on Thursday, April 21, 2005 - 3:56 pm: |
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Bets: Please stop maligning candidates. Perhaps you could instead explain to us which candidates you DO like, and why. Negativism may be your stock in trade, but I have to hope that you have some good, POSITIVE things to say about at least three of the candidates.
-s.
BTW: P.R. must be just a fading memory. Maybe you needed to spend more time there... |
bets
Supporter
Username: Bets
Post Number: 1177
Registered: 6-2001
| | Posted on Friday, April 22, 2005 - 12:42 am: |
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I'm doing the BTW first this time.
BTW: During a "dealing with difficult people" seminar I attended, I not so much "learned" as reaffirmed that every single human being on this Earth is dealing with difficult situations, tragedy, heartbreak, and alternately healing. Each face you see every day has the hidden burden of life. It's hard work, in the infamous words of our President.
On to your question. I am again late in answering, I took time during lunch at my desk to read MOL but then had to deal. You know how it is. Or was.
I am not maligning candidates. I am disseminating the information that I obtain. If you read it and choose to post accurate opposing viewpoints, that is your right as a citizen of TTOSOV. I have positive things to say about more than 3 candidates. My main worry is that the slate backed by Calabrese's funding will be elected to continue the same micromanaged village that is such a mess. We need new blood. V8?
I, as a woman, will now exercise my right to change my mind. There will be 2 BTW's on this one.
BTW: Soda, have you been down to PR to visit yet? Don't miss the opportunity to swing over to Vieques. We ran in to a prominent local attorney who has vacationed there for years. It is truly a stunning, beautiful island. |
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