In order to keep the property tax rate flat, council members debated using the $1 million in surplus it has banked.
Township Councilman Lou Signorino and Council President Peter McGuinness both said they favored using between $800,000 and the entire $1 million surplus to fill the budget hole in order to keep the tax rate flat this year.
“We have two choices,” McGuinness said. “It’s my ‘last hurrah’ up here and I’d like to see (the tax rate) stay flat.”
The council previously voted to use $400,000 of the surplus to whittle down a spending increase of $1.1 million over last year’s budget.
The approximately $34 million operating budget will have a public hearing and final adoption during a special June 24 meeting.
“I’d like to bring it down to zero,” he said. “I have no problem using the surplus.”
Mayor Michele Dale and Budget Consultant Bob Casey cautioned the council that using up the surplus would lead to the town’s bond rating going down, potentially costing the municipality more to borrow money for emergencies and capital expenses.
Casey said the council voted in March to keep $1 million in surplus, but Signorino said using the “extra money” in the surplus would be fine.
“I’m fine with spending the surplus, it’s extra money that’s there,” Signorino said.
When the issue came to a vote, however, Councilwoman Andie Pegel said she could not support using the surplus until she had more information.
That caused the motion to be withdrawn.
Likewise, a motion by Councilwoman Ada Erik to move the budget forward with the $800,000 increase, which amounts to about 2.5 cents per $100 of assessed valuation, also failed 2-4 with Pegel, Signorino, McGuinness and Councilwoman Patricia Gerst voting against it.
If approved as is, the budget would increase municipal property taxes by about $100 for the owner of an average township home assessed at $246,000.
Dale said the problem with using more of the surplus funds is that it “kicks the can” down the road and could mean a bigger tax increase next year.
She said the only other option would be for the council to reduce spending and cut the things included in the budget.