February 21, 2012
By LYNDSAY CAYETANA BOUCHAL
BYRAM — The council's Feb. 7 vote to increase the township appropriations cap from 2 percent to 31⁄2 percent has triggered a referendum petition drive to repeal the decision.
"The state has a law that says that homeowners should be protected from the spiraling costs of municipal government, and Byram, for 10 years, has chosen to continually pass an ordinance to circumvent the mandated budget cap," said Harvey Roseff, one of five petitioners.
Roseff, Joann Smith, Eugenia Moran, Merwyn Lee and Nelson Drobness make up the committee of petitioners in favor of a referendum. Nearing the 20-day deadline to submit a petition with 10 percent of the electorate's signatures, Roseff expects to deliver the document this week.
Since 2003, Byram has unanimously voted to increase the spending cap as recommended by township professionals.
Councilman Scott Olson said the council has routinely approved the spending cap increase for years as any unappropriated funds are retained in a cap bank, representing a "line of credit" or a "safety net" that can be used in upcoming years in case spending is cut or an unforeseen situation arises in the township. On Feb. 7, however, newly elected council members Nisha Kash and Carlos Luaces were the first to vote against the cap increase ordinance in nearly 10 years.
The appropriations cap determines how much Byram can spend, while the tax levy cap determines how much Byram can tax its residents.
Further, the township's ordinance incorrectly states that the mandated cap is 2 percent; however, the mandadate was changed this year to 21⁄2 percent. Township Clerk Doris Flynn said the ordinance is still valid after speaking with the state about the error.
"I want to lead by example," Luaces said. "It's time that someone starts to rein in spending."
Kash compared Byram's appropriations to a household budget: If a family can't exceed that amount, they don't.
"If that means cutting services here and there ... we just can't afford to keep increasing," Kash said. "Since 2003 we've had a cap bank, and since 2003 taxes have gone up steadily."
Olson countered, " To say that this has been the cause of tax increases or that this is taxing people is confused and not knowing of the facts. This is a tool for sound financial planning that's totally appropriate to use, especially in difficult times."
Matt Weng, staff attorney for the League of Municipalities, said municipal appropriations are limited to a 2.5 percent cap increase or the cost of living adjustment determined by the Department of Community Affairs, whichever is less, or a municipality can vote to raise the spending cap to a maximum of 3.5 percent.
"(If a municipality votes to increase the cap to the maximum), you earned that right to spend more because you spent less in previous years," Weng explained.
Byram's appropriations that were within the cap in 2010 equated to about $8.1 million. With the 31⁄2 percent cap applied, appropriations totaled about $8.4 million. About $240,000 was retained in the cap bank for potential use in 2011.
In 2011, Byram's appropriations were nearly $8.4 million, about $74,000 over the 3.5 percent cap. The township then used $74,000 from the 2010 cap bank for assistance, dropping the unappropriated funds to about $165,000. An additional cap bank was created in 2011 from other unused funds, equating to another $122,000, or a total of $287,000 for potential use in 2012.
"This cap bank is a slush fund," Roseff said. "We are asking the government to be more conservative and in these times be more focused on tighter budgets."
Township Manager Joe Sabatini said, "If you look back, we've never used the maximum allowable that this cap has given us in any year; we've always stayed within the amount. Just because we do this doesn't mean taxes are going up."
"If the (Cost of Living Adjustment) ordinance doesn't get passed, we can still adopt the proposed 2012 budget using cap banking from prior years," Sabatini said. "If the ordinance gets repealed, we will not have cap banking for 2012, which could be detrimental to the 2013 and 2014 budget cycles."
