March 18, 2009 THE VILLADOM TIMES I • Page 3
Franklin Lakes
Borough budget could include employee furloughs
by Frank J. McMahon The municipal budget the Franklin Lakes Borough Council plans to introduce on March 17 could include furloughs for non-contracted employees in order to reduce the amount of the budget that is over and above the state mandated cap on any increase in the borough’s tax levy. Steve Marcus, chairman of the council’s Administration Committee, which includes finance and personnel, emphasized the importance of introducing the budget at the council’s regular public meeting on March 17. He explained that any changes to the budget must be made prior to that date so the borough’s auditor can file the necessary documents with the state in order to seek a waiver from the four percent tax levy cap that has been imposed on municipalities and school boards by the state legislature. According to Marcus, the furloughs would be for one day a month, although some employees might want to take more, because not all departments need to be open every day if they are not related to public safety. He said the furloughs would be meaningful because they would result in a salary reduction and most employees prefer furloughs to layoffs. “Furloughs are good because the budget problem won’t last forever, and they share the pain among all employees,” Marcus told the council. He explained that furloughing is much preferred by employees to a reduction-in-force and that a reduction in work hours would be meaningful. Borough Administrator Gregory Hart advised, for instance, that if the police agreed to the furlough one day a week, the borough would save $83,000 a day. The borough’s preliminary 2009 budget is $1.5 million over this year’s state imposed tax levy cap of $9,359,959, and that tax levy cap is $750,915 or 8.7 percent over last year’s $8,609,042 million municipal tax levy. The tax levy is the amount of money the borough must raise in taxes to support the borough’s budget, and it determines the municipal tax rate. According to Marcus, the $1.5 million excess was caused by decreasing the amount of surplus that would be used to reduce the budget by $500,000 from last year, as recommended by the borough’s auditor, and the budgeted reduction in expected revenues from interest and construction fees. The council is considering the possibility of applying to the Local Finance Board of the New Jersey Department of Community Affairs for a waiver from the tax levy cap, but Mayor Maura DeNicola pointed out that Governor Jon Corzine has said he does not favor granting waivers and it is not certain that pension payments could be deferred. The deferral of employee and police pension payments was one of the things the council was considering in order to reduce the budget excess over the tax levy cap along with several other potential reductions in the budget. The council also discussed the possibility of raising construction fees to increase revenue even if they are only raised temporarily or with a “sunset” clause to set a time during which they would be raised. Mayor DeNicola indicated, however, that she was not in favor of raising fees during at this time. “We’re trying to manage our budget, but the residents are also trying to manage their budgets,” DeNicola said. (continued on page 23)
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