Reval alters property tax values in Holmdel Township Committee to vote on municipal budget Thursday night BY KAREN E. BOWES Staff Writer HOLMDEL - A $19.4 million proposed municipal budget will be decided by the Township Committee Thursday night. If the budget passes, homeowners will face a tax rate increase of about 5.5 cents over last year, from 45 cents to 50 cents per $100 assessed value. The state deadline for this budget was in March. This number does not include the recently decided $47.9 million school budget, which carried a 3.9-cent tax increase of its own. A homeowner's property tax bill also includes the 2.5-cent open space assessment, county, state and federal taxes, among others. However, these numbers are all essentially meaningless. According to Township Administrator Christopher Schultz, the recent revaluation, or reval, has altered property values in the township so much, the tax rate must also be altered. "The best way to describe it is, using last year's numbers, we're looking at a 5.5-cent increase, using last year's numbers," Schultz said Monday. "But obviously we're coming out of a reval, so you can't use last year's numbers." Schultz noted that after the reval, the average assessed value of a Holmdel home increased from $350,000 to $750,000, complicating matters. "In reality, the tax rate will be less because of the reval shift," Schultz said. But that doesn't mean taxes are going down. "I know it's confusing," Schultz said. "It's confusing to me because I've never been through a reval." What's not confusing are the hard numbers. According to Schultz, this year's municipal budget is about $29,000 larger than 2006. In 2007, the average homeowner will pay $2,024 in municipal taxes, about $220 more than 2006. "Last year it was about 45 cents," Schultz said of the tax rate. "Now, the tax rate is 22 cents. If you tell the public that, it looks like we have a decrease by 23 cents. That's not happening. What's happening is the reval - the numbers are all jumbled." Schultz anticipates Holmdel's 2007 revenue to be $2.5 million, down $750,000 from 2006. State aid is anticipated at $2.9 million, up $54,283 from last year. Use of the sewer surplus will remain the same at $650,000. Also of due note, the 2007 capital budget has not been discussed yet. According to Schultz, the proposed six-year capital budget plan for years 2007 to 2012 is $7.38 million. This includes planned improvements for roads, recreation improvements and equipment. According to Committeeman Larry Fink, the committee usually votes on the municipal budget, then considers the capital improvement budget. Although he does not necessarily agree or disagree with this process, Fink said things are done this way because the capital budget usually consists largely of bonded items, only of which 5 percent is included in the municipal budget ahead of time. In general, Fink said the township is becoming overreliant on the surplus sewer account as a way to balance the budget. He plans to call for a reduction in the quarterly sewer rate, he said, roughly $100 per quarter. "Even though we did manage to keep the tax increase flat or near flat, there is a significant reliance on the surplus funds from the sewer utility," Fink said. "Several hundreds and thousands of dollars were taken from sewer account. ... It has been done in the past, but I think we're becoming overreliant on that surplus account. It's not fair to the users, which is about half the town. They're subsidizing the rest of the town." Deputy Mayor Alan Bateman agreed that dipping into the sewer fund was undesirable, but said the real problem is the decrease in revenue. "It's a good budget," Bateman said on Monday. "We've worked hard to keep the town's operating spending at 2006 levels. We are still pulling from some of the surpluses the sewer funds and the deferred school tax. So on the positive side, we are weaning ourselves off of that. The real issue is our declining commercial ratables." Bateman said he is optimistic that the Lucent site - 2 million square feet of largely vacant office space - will once again bring in the tax revenue it did in the past, thus reducing the burden on homeowners. The budget will be voted at the Township Committee meeting on Thursday night at 7 p.m., following an open public hearing.