Morristown mayor blames COVID for tax hike in $51.5M budget

Mayor Tim Dougherty introduces budget to Morristown council, May 10, 2022. Screenshot by Kevin Coughlin
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Asking for the public’s patience and support “as we weather yet another year of strain,” Morristown Mayor Tim Dougherty on Tuesday introduced a $51.5 million 2022 budget that will increase annual municipal taxes by about $80 for the average homeowner.

“While our preparation has kept us afloat for the last two years, our financial health continues to be weighed down by economic pressures and inflation. The reality is that the town’s revenues have stagnated for the third year in a row, while costs continue to rise,” Dougherty, who is starting his fourth term, told the town council during a 90-minute hybrid meeting.

He blamed the pandemic for sharp drops in court fines and hotel taxes.

“In fact, the 2.2 cent tax increase is almost equivalent to the half a million dollars in municipal court revenue lost since 2019. And other revenues like hotel and motel tax and interest income have yet to rebound,” Dougherty said.

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Noting that the Hyatt Regency Morristown was closed for most of 2021 for renovations, town Administrator Jillian Barrick said it may take another three years for hotel taxes to return to pre-COVID levels — if business travel and tourism bounce back.

Without commenting, the council voted unanimously to introduce the spending plan. It returns for a final vote on June 14, 2022.

The owner of a home valued at the town average of $357,596 can expect his or her total property tax bill to rise by $85, to $10,355.  Increases of $80 for the town portion and $40 for the Morris School District are partially offset by a $37 decrease in Morris County’s tax levy. The Morristown & Township Library tax is only rising by $2.

“If it weren’t for the robust construction in town, and the PILOT revenues of over $1.3 million this year, we would be in an even more dire situation,” said Dougherty.

He referred to payments-in-lieu-of-taxes from projects such as the Modera 55 apartments. PILOT agreements are controversial because they boost municipal revenues by eliminating school tax payments by developers.

Administrator Jillian Barrick at Morristown council meeting, May 10, 2022. Screenshot by Kevin Coughlin

In a curious twist, Morristown homeowners will pay more in municipal taxes even though the town is under the 2 percent state cap and operating- and its total budget is slightly lower than last year. The lower bottom line reflects diminished revenues, according to Barrick.

Although salaries are going up by less than 2 percent, she said, the town is saddled with hefty increases in health insurance and pension costs. Low interest rates, meanwhile, have yielded miniscule returns on municipal investments, she said.

Legal expenses are up because of rising litigation, and the replacement of in-house legal  services (municipal Attorney Vij Pawar left last year for a judgeship) with contracted help, Barrick said.

Court revenues for 2022 are projected only to be a bit more than half what they were in 2019, before COVID.  Likewise for hotel/motel taxes.

COVID-SENSITIVE REVENUES, Morristown 2022 budget. Screenshot by Kevin Coughlin

One pandemic bright spot: The virus drove many people outdoors — and into the town swimming pool. Memberships and revenues reached new highs. However, they still don’t cover operating costs, as competition for lifeguards has driven up wages, Barrick said.

Insisting there is “light at the end of the tunnel,” Dougherty said PSE&G and the water utility should complete massive replacements of underground lines and pipes this year. Improvements are coming to the Burnham Park pond and fieldhouse, Granby Park (new bathrooms) and the new Speedwell Avenue park near Modera (awaiting a sculpture), he said.

Deloitte is accelerating its arrival at it new Morristown headquarters, to late spring, and a traffic roundabout that is part of that M Station redevelopment, should be finished this year, Dougherty said. Valley National Bank’s national headquarters, scheduled to open next year, “is a fully taxable project,” he added.

The mayor voiced “cautious optimism” about redevelopment of North Park Place and the historic Morristown post office, two areas that “have languished far too long.” He said Rep. Mikie Sherrill (D-11th Dist.) is seeking funds to control flooding at Speedwell Lake and Lake Pocahontas.

He also vowed more vigorous enforcement of town codes, warning owners to properly maintain their properties.

BUDGET NUMBERS
  • The school budget accounts for about 50 cents of every local tax dollar; the town accounts for about 37 cents, the county just over 11 cents, and the library, 1.5 cents.
  • Morristown’s tax ratables are assessed at almost $2.3 billion, up by $3 million.
  • The town employs 192 full-time workers.
  • Public safety — police and fire–receive almost a quarter of the town’s spending; insurance, public works, general government and pensions are next.
  • Health insurance costs are up by 6.5 percent; a pair of pension obligations are up by 13.6 and 6.3 percent, respectively.
  • The town’s $44 million operating fund is down by 1.5 percent, and its $51.5 million total tab is 1.3 percent below 2021.
  • The budget is nearly $406,000 below the state’s 2 percent property tax cap.
  • About 58 percent of the town’s revenues are from the tax levy; surpluses, state aid, grants, and other sources provide the rest.
  • Since 2001, the state has siphoned nearly $22 million in energy taxes from the town, the equivalent of $351 for the average homeowner, the town calculates.
  • About $2 million is budgeted for capital projects; the lion’s share is for roads and engineering.
  • The town’s debt is just shy of $28.5 million; net debt has declined by 36 percent, or $16.3 million, since 2010.
  • The sewer utility has about $2.4 million of debt, which Barrick anticipates will be paid off in two years.
  • Morristown is applying $3.8 million in surplus funds toward this budget. “We can’t keep eroding our fund balance,” Barrick warned; the surplus has diminished from close to $15 million in 2015 to just under $10 million in 2022.

IN OTHER BUSINESS

Andre Harris implored the council to remove a Clyde Potts Drive barricade that he said hinders emergency access to his grandmother and other residents of public housing in flood-prone Manahan Village.

Andre Harris address Morristown council, May 10, 2022. Screenshot by Kevin Coughlin

“Every time it rains, we’re closed off from everything. It’s really hard to get in there,” Harris said.

“I know we can’t move mountains in a day or in a night. But Morristown needs to help Manahan Village get a win,” he said, describing the community as “the heartbeat of Morristown.”

Another resident called to inquire why the reflecting pool at the tony Vail Mansion is empty.

The council approved minutes from an October 2016 meeting, left unfinished by a prior town clerk, unanimously adopted regulations for film shoots in town, and gave preliminary approval to the Morristown Partnership budget. The organization oversees the town’s Special Improvement District, promoting the downtown via streetscape projects, a Farmer’s Market and festivals on the Morristown Green.

Councilwoman Toshiba Foster, liaison to the Partnership, said businesses voted to return jeweler Bill Braunschweiger, architect Jeff Rawding and banker Kim Ryan to the Partnership board. Leia Gaccione, chef and owner of the south + pine America eatery, and attorney Robert Nish also were voted to three-year terms.

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13 COMMENTS

  1. Another genius who doesn’t understand actual COVID data and results enough to see that lockdowns didn’t save any lives anywhere. Oh and newsflash – Murphy and NJ got an F- in managing COVID and was in the top 5 for most deaths but yes staying open would have really added to that count when the states who stayed open fared much better. I guess you think masks stop the spread too.

  2. Questions raised by Ted and cblloyd ought to prompt a more lengthy explanation of the town budget, in a word, transparency, so that those who pay taxes understand what they are paying for—what the cost of legal and planning services are, for example—and, with respect to the increase in federal money, how it has been/will be appropriated, and more. Our town’s website is accessible to most, so more information could be provided on the site for those who seek it. Other related matters that come up at council meetings, such as the amount of money Morristown receives from the operator of the airport the town owns—which, clearly, needs to be significantly “updated,” given the use of the airport by corporations, former presidents, and others who can certainly pay more than those for whom the airport was originally intended, ought to receive special attention as well and the terms of the updated contract with the operator—assuming Morristown is finally negotiating new terms—should be made available to the people. We, the people of Morristown, through our government, after all, own the airport. Too many matters seem to “exist” below the radar, we need more light to shine on what the town is paying for the services it receives, and provides, and what the sources of income are, not only what it receives from the town’s taxpaying citizens, but what tax benefits are extended—lost tax revenue, in short—to “entice” developers that are already flocking to Morristown. The budget is one way to understand what government does and, frankly, what it is not doing.

  3. The administrator also said that legal costs are up ,can we please see a copy of and an accounting of every penny and every dollar that been spent on legal on the planning board lawyers ,as well as other representation and litigation?
    That would be very interesting to see.
    Also after the town lawyer got appointed by Gov Murphy to become a judge , did the Gov also play a role in picking the “New “ town attorney? Anybody asked?
    New attorney came from far out of town. Politics In action?
    Who hires these people? Who sets the wages snd fees?
    Does anybody care?
    It our government ,it should all be open for examination .
    Maybe not?

  4. No answers to your questions. Just higher taxes and fees.
    It’s taxation without representation.
    With record breaking development in town ,and tax breaks being giving out to some developers, what did the taxpayers expect?
    Life will go on ,the taxes will climb and it’s just too bad for those who pay and expect more accountability. Not getting that soon.
    Taxes were never “low or controlled “under this administration. Mostly “ smoke and mirrors!”
    When the town was $150,000,000 million dollars in debt ,the taxes went up $1000’s on property owners every year. It was all just passed on to the property owners. Expenses were never cut or altered.
    When all of this new development came taxes should have gone down.
    Where are the answers to that?
    “Silence is golden” in Morristown because it is a situation of the “unqualified “leading the “uninformed “ for a long time now.
    Taxes go up because of mismanagement and the fact that few read the town budget and even less care. “Ignorance is not bliss “in reality. Being smart and
    Informed matters after all.
    Excuses ,blame , and higher taxes are now the order of the day ,concerning the financial operations in the County seat.

  5. When a responsible Exec/CEO sees that his revenue base is falling, the first thing they do is look for opportunities to cut expenses. No mention of that here. But nice to see that the pass-the-buck talking points have filtered down from the Federal level to the local level. Can we find a way to blame Putin as well?

  6. The town doesn’t collect sales taxes. Avoiding stores in the town during the pandemic just hurt the stores. If the stores have to close, that could affect your taxes. It was so hard to wear mask. Such a hardship. Up there with the greatest tragedies in history.

  7. Our Town administration has done a great job over the last few years keep tax increases to zero for many years but we as residents still need to be prudent and ask a few questions around the proposed budget:
    – i didnt see mention of the added income to their town from the dollars sent to Motown during the Federal Covid spending spree
    – With all the development in Motown, how did commercial ratables go down and apartment ratables not change??
    – Wouldn’t the tax revenues come to Motown even without some of the PILOTs recently granted
    – Why are the revenues for Burnham expected to drop from last year?
    – The State hasn’t paid the expected Energy credit for the last 10+ years but has paid $3M. How have we been able to balance the budget through those years and now its an issue?
    – Why such a significant Health department budget increase
    – has moving to self-insured saved money? Looks like health care costs continue to go up

    Looking forward to some follow-up info

  8. To stuck in NJ. Morristown doesn’t collect sales taxes. And, I do recall you bragging about harassing a UPS employee in town by refusing to wear a mask. You are a miserable individual.

  9. When the delusional sloth of a Mayor reinstated the indoor mask mandate over the holidays in Morristown I chose to spend my money else where. I wonder how many people did the same.

  10. ^^
    Another Rhodes Scholar who doesn’t understand economics and tax policy, and would have preferred to keep everything wide open so thousands more New Jerseyans would die and suffer. Oh and newsflash – the vast majority of states, rather the majority of the world, shut down during the pandemic. Not just NJ.
    You probably also think that trickle down economics work.

  11. Funny how this is all the “virus’s” fault not his master MURPHY who shut everything down while this guy just blindly followed everything. Such a powerful virus indeed. Give me a break.

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