Fighting Taxes on All Fronts

This country is facing significant economic challenges that have impacted Teaneck significantly. In this climate, it's refreshing to see a new-found zeal for fiscal responsibility by members of the Township Council. In just days, members were able to find $1 million in cuts to the Board of Education's budget, while it has struggled to find the $600,000 still needed to get down to "only" a 4% increase in its own budget.

Based on equalized 2007 data from the Bergen County Board of Taxation (see here for the 2007 Abstract of Ratables), Teaneck has the third highest overall tax rate of $2.27 per $100 of equalized value, a penny less than Lodi and three cents less than the county's worst, Ridgefield. Our school tax rate is ninth highest, while the municipal tax rate is sixth highest of the 70 municipalities in Bergen County, which itself had the fourth highest median property taxes in the nation as of 2007 (see here for the 2008 data from the Tax Foundation, based on U.S. Census data). The owner of the average property in Teaneck pays thousands more in property taxes than a comparably priced property at the Bergen County median tax rate.

Voters were justified for expressing their frustrations with the 2009-10 school budget, and there is ample room for improvement in budgeting at the Teaneck Public Schools. As I have pointed out, Operations and Maintenance per student in Teaneck for the 2008-09 school year was $2,532 compared to a statewide median of $1,503 per student for all K-12 districts. Bergenfield spends $850 less per student, Fair Lawn more than $950 less and Ridgewood about $1,150 less per student on Operations and Maintenance, a chance to save millions without affecting in-class education (see here for the 2009 Comparative Spending Guide from the New Jersey Department of Education). The Board of Education needs to start immediately on crafting a budget for the 2010-11 school year that reflects difficult economic conditions and declining enrollments, and would be well-served by creating a functional equivalent of the Financial Advisory Board of its own.

With the school budget facing a reasonable probability of failure this year, it seems hard to understand why Council members seeking bigger cuts didn't take the time to prepare themselves for the possibility of considering cuts in advance or why the Council didn't avail itself of the services of its Financial Advisory Board, which had been created with the express purpose of advising the Council on a failed budget and given that some of its members actually attended many of the Board of Ed's budget meetings.

Other people's problems always seem easier to solve, and this Council needs to start facing its own deep-seated budgetary problems. Since 1998, the length of this Council's institutional memory, inflation has raised prices a bit more than 30% in those 11 years, an average of about 2.5% annually (see here for Consumer Price Index data from the United States Bureau of Labor Statistics). In that time, the school budget has risen by 60%, or 4.4% a year. But the municipal budget has grown by 85%, more than 5.7% annually, more than double the rate of inflation. Since 1998, the Township has added 27 employees to a base of 343, adding 8% to its staff while Teaneck's population has been essentially unchanged.

The current budgetary crisis the Township faces has only been exacerbated by the 2008 "0%" budget that was accomplished almost entirely by shortchanging the Self-Insurance Fund and pushing bills off to 2009, without making any meaningful changes in the way the municipality does business, and included a 4% average increase in salaries. This budget was unsustainable and we need to make real changes that improve our financial condition for the forseeable future, not just pushing this year's crisis to next year. I sincerely hope that we can see the Council get down to the 2.5%-3% increase that it imposed on the Board of Education.

We're already more than four full months into this fiscal year, and any cuts in the municipal budget will only be in effect for a few months this year. As I have suggested as a member of the Visioning Process and on the Financial Advisory Board, a rotating internal study of each department over the course of each year will allow Council members to better understand how each department works and to identify areas where savings can be achieved without shortchanging services. We need to set benchmarks, comparing our per capita spending on each department to those of our surrounding communities, many of whom spend far less than we do. And this Council ought to consider paying the $7,500 to $10,000 for an audit of its own expenditures, one that I have never heard a call for in my more than a decade attending municipal budget meetings.

Alan Sohn