Tax cap hits rich towns

For example, no more on-demand trash collection in wealthy Millburn.

December 31, 2011|By Elise Young, Bloomberg News

The days of on-demand trash pickup are over for residents of Millburn, the Essex County community best known for the Mall at Short Hills, where Cartier diamonds meet Dior fashions.

Homeowners in the town of 18,700 people 20 miles west of Manhattan were accustomed to summoning a public-works truck at no charge to collect whatever they neglected to set out on garbage day.

On Jan. 1, a cheaper private hauler will replace municipal employees collecting trash in the township, whose $170,000 annual median household income is more than triple the national average.

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"You would call and they would come, and that's not going to happen," said Mayor Sandy Haimoff, 73. "People will realize they have to get the garbage out the night before."

While poor cities such as Camden and Newark struggle with reduced state aid that has forced them to cut police forces, some of the wealthiest towns in the second-richest state also are rethinking expenses as they cope with Gov. Christie's 2 percent cap on annual property-tax growth. The first-term Republican cut aid to towns last year and limited annual increases in local taxes, forcing mayors to weigh worker firings and program reductions.

Montclair, a community of about 37,000 people 12 miles west of Manhattan, has shed 10 percent of its workforce in two years, said Township Manager Marc Dashield. This year it cut library funding to a state-mandated minimum of $2.36 million, from $3.13 million, and scrapped the budget for its arts council and First Night, an alcohol-free New Year's Eve celebration.

"We had to make a decision and say, 'These are the core functions of government,' and anything outside was open to examination," Dashield said. "The arts council was a great thing for this community. First Night was a great thing for this community. But it was outside the parameters."

A property-tax cap in New York that will take effect Jan. 1 will have a similar impact, Moody's Investors Service said in a July report. Gov. Andrew Cuomo signed a law in June that prohibits any annual increase above 2 percent or the rate of inflation - whichever is lower - unless 60 percent of voters agree. Moody's cited that cap this month when it downgraded the credit ratings of the village of Suffern and the city of Long Beach.

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