Township taps deferral
By ROBERT LINNEHAN
The Cherry Hill Sun
5/22/2009

As a way to keep down costs for the current budget year, Cherry Hill representatives decided to utilize the recently approved Pension Deferral Bill to keep tax rates stable for the next several years.

On March 16 the Pension Deferral Legislation was approved, which allows municipalities to reduce their state pension costs by 50 percent for 2009. It’s only available for one year and any municipality that decides to use the deferral would have to pay back the remaining costs by 2012.

According to the New Jersey League of Municipalities, any municipality that decides to take advantage of the deferral will have to demonstrate the need to do so and have the request approved by their local finance board.

Communications Director Dan Keashen said the township would be deferring about $1.7 million of its pension costs for this budget.

The pension costs in the township total about $4.3 million for this year.

The deferral, Keashen said, will help stabilize the tax rate for this budget and for several years to come. The township runs on a fiscal year, and the budget was passed last month. The township started mailing out quarterly tax bills in July, when the fiscal year began.

Keashen said a homeowner with an average assessed home of $140,000 will see their next quarterly tax bill increase by about $10 to $299 for their municipal taxes.

The budget was passed last month when the state announced its aid figures.

“It’ll have a stabilizing effect on our tax rate over the next couple of years. It’s far and away not the mayor’s favorite option,” Keashen said. “It’s an unattractive choice. We’d rather not do it, but the governor proposed the option for a reason because everyone has been affected by the recession. We’re not immune by any means.”

In the past two years, Keashen said the township has lost about $1.5 million in state aid and about $4 million in construction revenue.

The township won’t have to start paying back the deferral until 2012 and will pay the funds back to the state over the course of 15 years.

Hopefully, by 2012 the economy will have sufficiently recovered and revenues into the township will have recovered, Keashen said. The township won’t just be paying back the deferral in one lump sum, he said, which will be easier on township taxpayers.

“According to the governor’s office and all economic indicators, it looks like the economy is taking baby steps to recovery right now.

With that said, we are confident,” he said. “This is by far and away the worst economic conditions the country has faced since the great depression. As we move forward through this process, we’re seeing the economy rebound with baby steps. We have confidence revenues will recover by 2012.”

By township estimates, Keashen said the next budget will likely contract by about $1 million from the current budget. Reductions and various cost-saving measures will likely make this a reality, he said.