Stahl fears future revenue shortfall
Capital budget spurs debate on town's finances down the road
BY VINCENT TODARO
Staff Writer

David Stahl

EAST BRUNSWICK - Though Democrats on the Township Council have traditionally supported the capital budget, this year's plan has found opposition in at least one member.

Councilman David Stahl said he fears the $3.3 million budget proposal, introduced by the council March 12, will jeopardize the township's long-term economic standing. Democrats Donald Klemp, Edward Luster and Nancy Pinkin supported the budget's introduction, while Councilwoman Catherine Diem was not present for the vote.

Stahl said he supported past years' capital budgets, but he is worried about the effect of the 2007 plan on future years' operating budgets and taxes.

Though the capital budget sticks to the town's previous formulas and does not bring about an increase in taxes, Stahl said other factors have changed, including a stricter cap imposed by the state on local spending.

Also, come 2009, the township will no longer be receiving $4.5 million per year from Toll Brothers for its purchase of the Golden Triangle on Route 18. The township will instead receive $4 million, leaving a $500,000 shortfall. The payment will be reduced further in 2010, and by 2011 the Toll Brothers payments will cease entirely, Stahl said.

Based on today's numbers, the township would need to raise the tax rate 22 cents to make up for that shortfall, Stahl said. However, the new developments within the Golden Triangle area, including residences, offices and retail, could be paying taxes to the township by that time.

Stahl said tax or other revenue from the Golden Triangle project will not be in the township's hands until later than expected because of delays in Toll Brothers' construction plan. The builder is expected to soon move forward with a commuter parking deck on the site, but it has not filed plans for the rest of the redevelopment project.

"We will have a period of time without payment or ratables," Stahl said. "How will we pay for accumulated debt?"

Toll Brothers, according to Stahl, has said that the Golden Triangle project will not be significantly completed until 2014 or 2015, thus delaying the

onset of full ratable revenue.

The township as a whole is largely built out, with little room for more homes or businesses, Stahl added, though he does assume some degree of tax ratable growth.

Luster said that Stahl has been on the council for four years, during which time much of the debt he is now concerned about was incurred.

Pinkin said she was worried about the millions of dollars being spent on new multi-use athletic fields at Heavenly Farms, which Stahl pressed to have approved.

"Dave, you really encouraged me to go forward with it. I really struggled with it," she said of her decision to support the turf fields and related drainage improvements.

Nonetheless, Stahl asked how the township will deal with a $4.5 million shortfall in 2011.

Township Finance Director L. Mason Neely said the town will "have to face it full on," though it could make a case to the state for leniency.

Neely said such a shortfall would have a "significant impact on every homeowner."

But Neely said he would support a town-wide revaluation of all real estate, noting that many commercial and industrial entities are not paying their fair share of taxes. Some residents would face increased property taxes after a revaluation, while others would see a decrease.

Earlier in the meeting, Stahl also mentioned that he is in favor of a property revaluation.

Neary, however, said he is not in favor of a revaluation because it would significantly raise the taxes of residents who have lived in the township for many years.

Regarding the Golden Triangle redevelopment, Neary stressed that the parking deck should be completed by June 2008, and that "significant" tax ratables are coming to East Brunswick. An independent study commissioned by the township analyzed the Golden Triangle concept plan and found it would generate nearly $4 million in municipal and school tax revenue, though there would be some costs related to township services.

Neary said the township's spending policies have been "very conservative," adding that if the town delays projects and purchases in the capital budget, it will only cost the town more money in the future.

Stahl said he is concerned about other economic factors such as the increase in interest the town has to pay this year, up by $4 million from 2002. Also, he has learned the state is lacking money for its open space fund, despite the expectation that it will give the township $600,000 per year to pay for the purchase of Heavenly Farms.

"Will we have to pay it off ourselves?" Stahl asked.

Stahl said there is no way for the township to get an additional 15 percent of tax ratable growth to make up for the end of Toll Brothers' payments.

As an example of an incoming revenue source, Neely noted the former Meyer's shopping center, which is expected to become a strong tax ratable when it is developed as the Summerhill Square shopping center.

But Stahl countered that he has seen no sign that Summerhill Square, though approved by the township, will be built and operational anytime soon.

Klemp also referred to the multi-use fields Stahl promoted, saying he is glad they were constructed but that Stahl should realize the township has to offer other services as well. Neary mentioned in his capital budget address that roads and infrastructure were largely neglected before his term as mayor.

At one point in the meeting, Luster asked Stahl what area of the capital budget he opposes. Stahl responded that too much is being spent to expand the municipal parking lot and on the warehouse at Baseball Manager's complex. He also mentioned the purchase of dump trucks.

Luster countered that parking space has always been an issue in the township, and it makes sense to address the problem.