Your Turn
Guest Column
Committeeman sees high tax increases on horizon
John Pfefferkorn
Guest Column
Committeeman sees high tax increases on horizon
How many of you recall the classic television show "Truth or Consequences?" The game’s theme centered on contestants’ ability to determine lies from the truth or be faced with embarrassing consequences or prizes.
Over the past several months, many of Millstone’s residents have seen a local version of that game unfolding where the residents are being fed propaganda and lies and the consequences are higher taxes and debt.
Millstone’s "prizes" start out slow with 2004 consisting of a moderate tax increase. But in 2005, as school construction costs are incurred, we see a hefty jump. And by 2007, stiffer taxes are here to stay as middle school operating costs escalate and municipal costs jump significantly as revenue growth slows down and municipal capital spending and operating costs continue to accelerate. We quickly experience the consequences of living in a community where the bulk of new spending must be funded by only 3,000 homeowners.
In November 2003, the public received a long-awaited tax presentation by our township CFO and township auditor. These professionals calculated our overall tax levy would increase from $25.4 million in 2003 and escalate to $45.1 million in 2008. That’s a 77 percent increase in taxes. Unfortunately, their projected ratables growth of only 1.1 percent annually from 2006 to 2008 does little to offset the projected tax rate which escalates from $2.06 in 2003 and rockets to $3.39 in 2008. For a $400,000 home, the increase is $5,320 more annually, or $13,560 in total.
But don’t look too close, because the professionals needed to consume $4.4 million more of your surplus and projected needing an additional $15 million in new debt load just to keep at that rate. So expect further rises beyond then.
Remember, there are more "tax prizes" on the horizon. With the board of education asking for 100 acres of the Waters property to consider growth with a potential high school, $50 million more capital would be needed.
Let’s be honest with the public and stop the lies, disinformation, and propaganda that have been in your mailboxes the past few weeks. Only weeks ago, one of the rookie committeemen published a letter in the Examiner about how the two rookies were cleaning up the finances and going to reduce municipal debt in 2004. Within three weeks of that letter, the committee voted (in a split vote) for an additional $1.8 million in new debt authorizations with $3 million more debt coming later this year.
Can anyone really save Millstone from the inevitable tax increases? While our paid financial professionals foretell a gloomy tax picture based on factual evidence, the propaganda masters proclaim the opposite. Is it pure deception or blatant public fraud?
We have a horrific tax problem approaching and we need major solutions. Opportunities for spending cuts are very limited. With education costs representing over 70 percent of every dollar of revenue, we need to change the formula of revenue generation. Ten-acre zoning slowed down growth, but it doesn’t fix our impending tax crisis.
Let’s remind ourselves that we have limited potential for ratables growth in our relatively small business parks and remaining highway commercial zones. Most of the town’s remaining undeveloped land is zoned residential and that brings higher educational and recreational infrastructure costs.
Government’s role must be to provide reasonable taxation for its residents and a balance of housing options. Creating a housing niche that only the wealthy can afford may lead to a court challenge and possibly overturn our current zoning plan. And for those who can’t afford these new higher taxes, putting our homes up for sale shouldn’t be the solution.
One option the township committee needs to consider will require public discussion of a zoning amendment to allow active-adult housing as a realistic tax solution since it brings pure revenue flow without any educational cost element. And similar to the cluster incentive offered developers for keeping the "mother lot" rural, the town would be able to preserve additional open space (without any cost to taxpayers) by combining that plan with a rural buffer feature.
Conservatively, the incremental net cash flow improvement (school taxes collected less education costs) generated from a clustered $400,000 active-adult home not sending kids to school vs. an $800,000 home on 10 acres (sending an average 0.7 kids to school) would be about $3,000 more net revenue per home. Your tax savings would increase exponentially if higher density is allowed.
With land options still available, active-adult housing is an idea worth pursuing. The truth about the tax consequences won’t wait.
John Pfefferkorn is a Millstone Township committeeman












