Pennington property owners are projected to face a 2.5-cent increase in municipal taxes for 2025.
In a budget presentation on Feb. 24, the proposed municipal tax rate would increase to 57.5 cents per $100 of assessed valuation. The owner of an average assessed home at $488,000 would pay $2,806 in municipal taxes.
“If we were to adopt this budget in April as it is with no further adjustments, the average house assessed at about $488,000 is going to see a $122 increase in the local municipal rate,” said Sandra Webb, the borough’s chief financial officer (CFO).
The tax rate is under a proposed $4.8 million budget scheduled to be introduced by the Borough Council on March 3 and would fund municipal operations in 2025.
Municipal taxes are one item on a property owner’s total tax bill, which also includes the Hopewell Valley Regional School District (HVRSD) taxes and Mercer County taxes.
The amount an individual pays in taxes is determined by the assessed value of his or her home and/or property, and the tax rate that is set by each taxing entity.
Property taxes are the main source of revenue supporting the budget. The amount projected to be raised by property taxes for 2025 is $3.28 million.
On the revenue side, the projected budget revenues include $814,787 in the use of surplus, which is an increase of $236,000 from 2024; $189,585 from the energy receipts tax; $105,000 in uniform construction code fees; $70,000 in receipts from delinquent taxes; $57,000 from trash collection fees; $50,000 from the municipal court; and $41,900 from cannabis.
On the appropriations side of the budget, the budget will fund appropriations that include $325,745 on municipal debt service.
Additional appropriations include $733,000 for police salary and wages; $459,100 million for insurance, $433,250 for streets and roads (includes salary and wages), $301,127 for shared service agreements, $240,365 for the maintenance of the free public library, $108,000 for utilities, and $70,000 for legal services and costs.
The Finance Committee and borough administration were able to reduce a significant increase in the legal budget by close to $49,000.
Additionally, they were able to remove $104,000 from the operating budget to do asphalt for road resurfacing requested by Rick Smith, superintendent of public works, which will now be part of a capital bond ordinance.
The borough will not be using $100,000 from water and sewer revenues in the operating budget, which had been utilized for the budget in 2024, according to Councilwoman Catherine Chandler.
“… Obviously there is a little bit of an impact there, but that was a request from council, and we are honoring that,” she said.
Borough officials anticipate the additional use of fund balance (savings) in the amount of $236,000, which is seen above in revenues as use of surplus, and cannabis revenue of $42,000 from only a portion of the year.
“We know as the years go on that (cannabis) revenue will grow certainly from just what we have seen in January of this year,” Webb said.
The budget drivers in 2025 include a $10,000 increase in the engineering services, an increase in buildings and grounds by $11,200 due to janitorial expenses, an increase in planning and zoning salary and wages by $18,000 with a new employee coming on board, and there is a little more than $75,000 in increased costs for insurance.
The overall budget for road repairs is up $57,000 despite the removal of $104,000 for the asphalt for road resurfacing.
“Garbage and trash continue to climb (due to Mercer County increases), and pensions and social security are up,” Webb explained.
Garbage and trash is increasing by $22,000 and pensions and social security is increasing by a little more than $53,000.
During the budget presentation, Councilman John Valenza and Councilman Charles Marciante each raised issues they had with an increase in the municipal tax rate proposed for 2025.
“We are looking at another tax increase, which I said I would not vote for after I voted for it last year,” Valenza said. “I am not going to vote for a tax increase, and I would encourage everyone to find $250,000 so we don’t have to do another tax increase.”
Valenza raised issue with using more fund balance (savings) in the budget and that there still needs to be a tax increase.
“To take more money than you need makes no sense,” he said.
Webb warned that she thinks it is a huge risk to take the surplus down “… if we anticipated every penny in our budget for this surplus. That would be reckless. I would never recommend that.”
Mayor James Davy noted that municipalities rely on building up that surplus balance at the end of the year so that you can apply it to the following year.
“If that is not regenerating itself you are looking at tax rate increases every year, huge tax rate increases,” he added.
Pennington’s surplus (savings) at the end of 2024 was $1.1 million, Webb said. The surplus in 2023 was $723,000 and of the $723,000, they used $578,000 in the budget for 2024. Pennington generated more than $900,000 last year in (surplus).
Marciante also called for no more tax increases.
“I agree with John (Valenza),” he said. “We have got to stop driving the older members out of this town.
“… The borough is a great place to live, but you can’t retire here… You have to cut that budget so they can afford to live here so you don’t have these tax increases. I don’t know where you do that at.”
Chandler said prices are not going down in any area.
“Expenses are going up,” she said. “They go up for a borough just as the way they go up for a family.”
Valenza suggested that if costs are going up, they have to have a conversation with the community about the ramifications if they don’t want municipal taxes to be increased in the borough.
