Just three New Jersey towns asking voters to OK tax hike

Towns across New Jersey are in turmoil as they struggle to balance budgets by cutting services. They are laying off police and other staff, closing town halls on Fridays, shutting libraries, borrowing money, depleting surpluses, and using one-time fixes.

But raising taxes has become such a taboo that only three of the state's 566 municipalities will be asking voters for permission to boost taxes beyond a state-imposed 2 percent cap.

Last year, when municipalities were first required to get voter approval to exceed the cap, 14 dared to hold referendums. Twelve failed, including Medford Township's.

Now Medford is alone in trying again.

"We don't have a choice. . . . We can't pay our bills," said Mayor James "Randy" Pace. Another defeat could trigger a state takeover of the town's finances to prevent a bankruptcy, he warned.

Last year, residents in the Pinelands community in Burlington County overwhelmed the polls and defeated the question 5-1.

Mansfield Township is not so daring. Mayor Arthur Puglia said he was shocked when residents rejected a tax increase that would have raised the average household bill by just $24 to assist an underfunded ambulance squad. Stung once, Puglia isn't going there again.

But Medford is at rock bottom. Moody's issued a warning on its credit rating late last year and the town faces a $6 million hole in its proposed $19.1 million budget for 2012. This after laying off police and public-works employees, eliminating the recreation department, slashing the parks budget, and selling rather than leasing space atop water towers for use by cellphone companies.

Medford notified the state Department of Community Services on Wednesday that it would appeal to voters for help on April 17. The other two towns that gave notice they will hold referendums are Lawrence Township in Mercer County, and tiny Demarest Borough in Bergen County.

Medford will be asking voters to approve a 25 percent increase in the municipal levy - almost the same amount as last year - to bridge the budget gap and pay down debt. Taxpayers whose homes are newly assessed at the township average of $333,000 would pay $344 more in municipal taxes if the vote is yes.

A defeat would force Medford to discontinue municipal trash pickup - for starters, Pace said. There would also be more layoffs, including possibly more police.

It's the notion of losing municipal trash pickup that has touched a nerve. About 1,000 residents in the town of 23,000 have signed a petition urging that trash collection be retained. Signs have sprung up warning that the town's appearance would turn, well, trashy.

One resident fretted at a budget meeting last week about "trash wars" if residents contract with different hauling companies.

Many among the 60 residents at the meeting cheered when the council said it would ask voters for a tax hike to save municipal trash collection.

Trash pickup proved to be decisive with voters in the two towns that approved tax increases last year. Voters in Lambertville, along the Delaware River, wanted to bring back municipal trash collection after a year's hiatus.

Lambertville Clerk Cindy Ege said the private haulers cost just as much as the public-works crew - but with no federal tax deduction for residents.

That would be the case also in Medford, township officials say: The private trash pickup charges of roughly $200 would nearly wipe out any savings on taxes.

Voters in Brick Township, Ocean County, agreed to a tax hike in 2011 to prevent the elimination of their municipal trash services.

In Medford, a revaluation could influence the outcome.

Pace said about a third of the residents would see a bump in their tax bill from the recent revaluation and many of them could be "no" votes, he told the meeting.

But in an interview, he wrestled with the question of what voters would do. "I am an idealist. I believe in my fellow man's ability to make the right decision when faced with insurmountable odds," he said after a long pause.

Pace, who has never held political office before, said he and the newly elected council are making an all-out effort to educate the public.

He is part of a new, all-Republican regime that was sworn into office in January after the former mayor and four councilmen - who are also Republicans - either resigned or were replaced.

Pace said the town is now in dire straits because the previous council failed to control spending, relied on borrowing, and kept taxes flat for five years, from 2006 to 2011, creating the budget deficit.

"We won't recover if we don't make this adjustment, we simply won't," he said.

Township Manager Christopher Schultz said he has trimmed the budget as much as he could.

The referendum will basically ask residents if they want trash collection or a smaller tax bill, he said.

"If we put too much into it, it may go down like last year," Schultz said. He also said that last year's defeat may have been due in part to residents' feeling "frustrated and mad."

Back then, residents packed meetings to question the previous council about high legal bills, a generous arrangement with a construction company, and spiraling debt.

That council also turned to one-time revenue sources and accounting tactics, which now precludes Medford from applying for special transitional financial aid from the state, Schultz said. To be eligible, he said, "you have to show the town did not put itself in the position it's in."

The new council, he said, wants to end reliance on debt.

"If we get this reset, then we're living within our means, and we haven't been living there for the past five years," Councilman Frank Czekay said. "People say, 'Don't eliminate our trash,' but we really haven't been paying for it."