Moorestown mayor: Not really a tax increase

Posted: June 23, 2012

So when is a tax increase not really a tax increase?

Days after Moorestown's all-Republican council introduced a $22.5 million budget that Mayor John Button had insisted not raise taxes, he sought to explain why it is not a tax increase for residents, on average, to pay $21 more this year.

"There's a difference between a tax-levy increase and a tax increase," Button said in an interview Thursday, pointing out that the total tax levy - $15,428,163 - was not being raised. Many individual residents would pay more because of revenue losses from declining real estate market values and tax appeals.

The average municipal tax bill now would be $1,780.

Just a week ago, the mayor had insisted that the township manager and finance director redo a proposed $22.7 million budget because he said it called for a tax hike.

"It's just not the time to raise taxes," Button said in an interview last week after he criticized the original spending plan, which called for a $53 tax increase on a house assessed at $529,800, the township average.

A long delay in introducing the budget already had put each of the five council members, including the mayor, at risk of being fined $25 a day as a state-imposed final deadline neared.

Button, who recently announced he is running for reelection as an independent after failing to get the endorsement of the local Republican Party, acknowledged he had voted with the majority in favor of the original budget weeks ago. Then he changed his mind and said he could only support a spending plan with a "zero tax increase."

After he "went over the budget with the town manager," Button said Thursday, he had to pick between a "zero tax-rate increase" and a zero tax-levy increase.

"I had to come to terms. . . . I said OK if we get zero tax-levy increase," the mayor said.

Finance Director Tom Merchel said that successful tax appeals had led to a $50 million decline in revenues this year. To make up for this, he said, the tax rate needed to rise if services were to be maintained.

Merchel said that he asked Button whether he would agree to a flat tax levy, rather than insisting on a zero tax increase. Otherwise, he said, it would have been difficult to find enough spending cuts.

Button went along with that, and Merchel said he drafted the new budget, which trims public works and other departments and taps into some of the anticipated liquor-license revenues as well as a water and sewer surplus, but also includes a small tax-rate increase.

Township Manager Scott Carew said the original budget was more responsible because it allowed for emergencies, such as a storm or a major crime that could require overtime pay.

Under the proposed new budget, the township may have to use its surplus or approve an emergency appropriation that would be counted against next year's state-mandated 2 percent spending cap, he said.

Many towns, he said, are preferring to raise the tax levy up to 2 percent rather than make deep spending cuts to make sure they don't get in a bind in future years.

"It's a practice a lot of towns are adopting because the 2 percent cap is very restrictive when you look at contractual obligations, which a lot of times exceed that 2 percent," he said. And, when the tax levy is low, he said, "you have less room to make discretionary decisions" later.

Gov. Christie's 2 percent tax cap also is based on the tax levy, not the tax rate. Also, pensions and certain other expenditures are exempt from the cap.

So when Christie boasts how he has limited municipal tax hikes to 2 percent, taxpayers often are confused when they see their tax bills go beyond that.

A hearing and final vote on Moorestown's budget is scheduled for 7:30 p.m. July 23.


Contact Staff Writer Jan Hefler at 856-779-3224 or jhefler@phillynews.com or @JanHefler on Twitter. Read her blog at philly.com/BurlcoBuzz.

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