Evesham: No money to schools or fire district without talks

Posted: July 26, 2013

Asserting that New Jersey's tax collection process unfairly burdens municipalities, Evesham's township council said it would distribute no tax revenues to its school and fire districts until they agree to discuss sharing collection costs.

"I believe we need immediate discussions with these entities," Mayor Randy Brown told the council Tuesday night.

The panel voted unanimously to withhold the next round of payments to the Lenape Regional School District, the local school district, and Evesham Fire-Rescue.

Township officials project that Evesham will have to allot about $3.4 million this year for the collection of taxes, unpaid taxes, and lost property tax appeals.

Representatives of the local school board and fire district said that they understood township officials' frustration with the existing collection formula but that existing statutes barred them modifying the process on their own.

"There's not much I can do," said Sandy Student, the local school board president, who noted that the district had adopted its budget, which went into effect July 1. The township is scheduled to make its next monthly payment of $4.4 million on Aug. 1, Student said.

Lenape is due a payment of $3.2 million on Aug. 15, according to township officials. James Hager, business administrator for Lenape, did not return a call Wednesday.

Paul Thomas, financial officer for Evesham Fire-Rescue, said Wednesday that he had "heard rumblings" about the council's position but had not received any notification of its intentions. In February voters approved a 2013 fire-rescue budget of $8.36 million.

A former township manager and financial officer, Thomas agreed that the "system is imperfect," but said altering the tax collection formula would not change how much is collected or what property owners pay.

"You're just putting the pea under a different pot," he said.

Evesham officials agree, saying their goal is not to reduce the local property tax burden but to "spread the pain" of collection costs, lost assessment appeals, and unpaid taxes.

Under the current arrangement, Evesham's finance officer Tom Shanahan said, it typically falls to the township to keep tax increases under the mandatory 2 percent cap by "making cuts to the public safety budget or central administration or public works."

The result, he said, is that "there's always a corresponding impact on services," such as the number of police, road maintenance, or permit processing.

Brown, who has expressed interest in running for a state Senate seat or the governorship, said in an interview Tuesday that he was "really frustrated" that Evesham must raise property taxes by an average of $59 per household this year even though the proposed $32.8 million municipal budget is fractionally less than last year's.

Much of the increase is needed, he said, because the deflated real estate market has spurred many of the town's commercial and residential property owners to challenge their assessments since 2008, and many have won.

"The state tells us we should do another revaluation if we don't like it," Brown said. "But we just did one three years ago. A new one would cost another $1 million."

The council's plan, he said, was to find "a better way to split up this pie" of collection costs that now fall to his township and nearly all municipalities in New Jersey.

Shortly before the council's vote Tuesday evening, Brown stood at a whiteboard in council chambers and spelled out in green ink what he said were the more than $3.4 million in "costs that are not ours."

Because the school and fire districts receive 70 percent of the taxes that Evesham collects from property owners, Brown argued that they should together consider reimbursing the town:

$1.05 million, which represents 70 percent of the $1.5 million the township expects to pay out in lost property tax assessment appeals, plus $65,000 in lawyers and appraisal costs to challenge those appeals.

A reserve of $1.8 million, which the township is required to include in its budget to cover unpaid taxes for the school and fire districts.

$550,000, or 70 percent of the cost of operating the township's tax collector's and tax assessor's offices.

Brown and the council said they used a 70 percent calculation because the municipal budget amounts to about 15 percent of what the town collects each year, and another 15 percent flows to the county, which already reimburses towns for their collection costs.

A bill introduced last year by Sen. Anthony Bucco (R., Morris) calls for revising the tax collection system so that school and fire districts and other entities share some of the costs, but it has been stalled in committee.

"It's an important bill in light of the economy," Bucco said Wednesday, "but it's up in the air." He said it appeared Democratic leaders in the Legislature had little interest in advancing bills submitted by Republican lawmakers.

The office of Senate President Stephen Sweeney (D., Gloucester) did not return a call for comment.

Contact David O'Reilly at 856-779-3841 or doreilly@phillynews.com or @doreillyinq on Twitter.

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