Morristown officials cite soaring costs, tax appeals in proposed budget hike

 

A $60.6 million Morristown budget introduced Tuesday will increase municipal taxes by $207 for the average homeowner.

Crafting the proposed 2026 spending plan was a “long, painful, hair-pulling experience,” said Mayor Tim Dougherty, who renewed his calls for Morris County and the state to compensate the town for tax-exempt properties in the county seat.

Commercial tax appeals, police and fire salaries and pensions, a costly winter of sanding and plowing, and rising fuel costs from the war in Iran were cited as factors for a 3.25 percent increase in the tax rate.

The $52.8 million portion of the budget that funds town operations is up just over $1 million from last year. It means someone with a home assessed at the average value of $635,841, will pay an extra $17 a month, or about $207 more than last year, in municipal taxes, said town Administrator Jillian Barrick.

Paradoxically, this increase comes even though the administration says it has stayed within the state’s 2 percent cap. That’s because some hefty municipal expenses, such as health insurance, are exempted from that calculation, Barrick explained.

The same hypothetical homeowner will see a $331 annual increase for the Morris School District — the biggest ticket item on residents’ local bills, slightly more than half the pie.

A new voter-approved municipal open space tax adds another $64. (Two new playgrounds and relocated pickleball courts are coming, Dougherty says.) County taxes will go up by about $13. The Morristown & Township Library tax adds roughly another $4, and the county open space tax is another $3 for 2026.

All together,  that’s about $622 more in property taxes for the average Morristown homeowner — a 5.5 percent hike, according to the mayor.

The council introduced the mayor’s budget proposal 6-0 (Councilwoman Tina Lindsey was absent), and now will review it. A final vote could come at the May 26 council meeting.

‘COSTS ARE JUST SKYROCKETING’

Dougherty said the town has $538 million of tax-exempt properties — county buildings, churches, nonprofits — that would bring $9 million to town coffers if they paid taxes.

“We host nonprofits and institutions that provide tremendous regional value. But the reality is unavoidable…it affects the structure of the finances for the town…maybe it’s time that we talk to the legislators and we talk to the state” about this “structural imbalance,” he said.

The town’s net assessed valuation of just over $4.68 billion is down by about $73 million, or roughly 1.5%, from last year. That’s partly because of successful appeals by large property owners who challenged a 2024 town-wide revaluation, when values were set “at the height of the market,” Barrick said.

Police salaries rose 6.9% and fire salaries 5.4%, including step increases on top of negotiated raises.  These salaries and pensions amount to a nearly $1 million increase. Axon, the company providing police bodycams, is hiking its annual fees by $75,000 — one example of how prices for almost everything are rising, Barrick said, echoing the mayor.

“Costs are just skyrocketing,” Dougherty said.

Public safety — police and fire — is the town’s largest operating expense, almost 24 percent ($12.6 million) of its appropriations. Insurance is a close second at 21 percent ($11.2 million), followed by public works at 14 percent ($7.6 million), general government costs at 12 percent ($6.1 million), and pensions at 11 percent ($5.7 million).

All figures in this story are round numbers.

A 33 percent jump in utility costs is projected — though Barrick said such estimates are nearly impossible because fuel price volatility from the Middle East war.

State aid remains a long‑running sore point. The administrator said the state has continued to withhold energy tax receipts owed to municipalities, and now owes Morristown about $31.7 million dating to 2001, money she described as “statutorily our money.”

To blunt the collective blow, the town has continued tapping its surplus, a rainy-day cushion that has diminished by almost 43 percent since 2021. Through attrition, the full-time workforce has decreased from 195 employees to 191. License fees are being revamped.

BRIGHT SPOTS…AND PILOTS

There are bright spots, according to the administration. Barrick described the tax base as “diverse and stable.” The town maintains an AA+ (Stable Outlook) credit rating from Standard & Poor’s. And although the town is carrying $27.3 million in debt, its sewer utility remains debt-free.

Revenue increases, totaling $1.3 million, are:

• • More than $818,000 in “bed taxes” from Atlantic Health’s Morristown Medical Center. This basically replaces annual payments from a landmark 10-year tax settlement that just expired. Dougherty said other towns with hospitals should thank Morristown for suing Atlantic, which led to the statewide bed tax.
  • Some $132,000 in fees from the town’s first cannabis shop.
  • An $87,000 rise in hotel taxes.
  • Nearly $300,000 from M Station (home to Deloitte and Sanofi), as payments-in-lieu of taxes, or PILOTS.

Critics of PILOTs note that schools are denied funding — and local taxes keep spiking despite the massive projects that PILOTs incentivize. But Dougherty staunchly defended the deals.

PILOTs, he said, generate more than $3.8 million a year for town operations and have saved the average homeowner more than $2,500 in taxes since 2017. Those savings should approach $10,000 by 2035, he said.

He pointed to pending PILOT projects as signs of progress. Construction underway at the train station should bring about 80 new residential units by next spring. Work is expected to start later this year on M Lofts, a redevelopment bringing more units along with preservation of an historic Black schoolhouse and a Habitat for Humanity partnership to rehab a Spring Street tenement.

Construction also is slated soon for the Staples site, adding extended‑stay units to support incoming corporate tenants. The town remains focused on redevelopment of 25 Market St. — a hole in the ground for almost a decade — and on pushing for redevelopment of long-vacant storefronts on North Park Place, the mayor said. KPMG’s impending move into Headquarters Plaza will boost jobs, downtown foot traffic and local businesses, he added.

Morristown’s growth has enabled the town to satisfy its affordable housing obligation for the next decade, Dougherty said.

However, the budget also notes how PILOT payments diminish over their 20- to 30-year lifespans. This year’s payment from the Modera 44 PILOT is $158,000 lower than last year.

Meanwhile, the plan earmarks about $3.6 million for capital spending. Roughly half is allocated to roadwork and engineering.

More than four miles of town roads got repaved last year within the three-square-mile municipality, Dougherty said. He accused Morris County of neglecting its roadways within the town, calling county government claims of prudent fiscal management “a shell game.”

Elected in November to a fifth term, Dougherty praised Barrick and Chief Financial Officer Frank Mason for creating a sound budget in difficult times.

“You know, Frank’s a man of a few words. Usually, the words are: ‘It’s not good, Mayor,'” he recounted, to laughter.

But Dougherty acknowledged the serious impact of taxes.

“We know what rising costs mean for families, and especially for seniors on fixed incomes. This year’s proposal increase was not a decision made lightly,” he said.

“We worked hard to minimize the impact. We scrutinized every vacancy, relied on attrition where appropriate, and reduced or delayed expenses without sacrificing core services… we will keep making careful disciplined choices with Morristown’s long term stability and sustainability in mind.”

Download the 2026 Budget Presentation

Mayor’s prepared remarks 2026 budget

Watch the budget presentation

IN OTHER BUSINESS

Police figured prominently throughout the news-crammed meeting.

The council unanimously approved a one-year contract extension, retroactive to Jan. 1, for rank-and-file officers, whose five-year pact expired. Salaries range from $36,559 for new hires to $124,995 at the top end.

Police also were implored by residents, and nudged by the mayor, to crack down on motorists speeding through the Jardine Road/ Olyphant Drive neighborhood.

And Joseph Heuneman, who joined the police bureau in 2007 after working as an IT professional for a New York financial company, was promoted to captain, overseeing the patrol division. He has won awards for his diligent enforcement of drunk driving laws.

The council also adopted a stricter alcohol ordinance enabling police to ticket persons carrying open containers of alcoholic- and cannabis- and hemp-derived beverages in public.

Low-bidder Zuccaro Inc. of Garfield was awarded a $432,876 contract to erect a traffic crossing beacon near the train station, at the intersection of Morris and King streets. Partial funding will come from a $296,000 state Department of Transportation Transit Village Grant. The company installed the HAWK beacon at Speedwell Avenue and Flagler Street.

At a special hearing prior to the regular session, the council gave a haircut to the Homestead Bar & Kitchen’s request for outdoor alcohol sales during the World Cup soccer tournament.  The Homestead requested 21 dates in June and July; it got approvals for June 19 and July 19, with an option for three more if the US team advances. TV screens will be set up behind a South Street podiatry office bought last year by the DeHart Street bar, which adjoins the backyard.

World Cup fans also should note that any Morristown establishment with a liquor license can serve them alcohol starting at 10 am, instead of noon, on Sundays during the tournament. (Proprietors must pay a $50 registration fee.)

That measure, like Homestead’s, passed 6-nil. Councilman Robert Iannaccone lobbied to make the 10 a.m. change permanent; Council President Steve Pylypchuk said the governing body will consider it.

And… the mayor proclaimed May 31 as Pi Theta Omega Day, honoring the 40th anniversary of the Morristown chapter of Alpha Kappa Alpha Sorority Inc.

The organization supports youth and education programs, scholarships, hunger relief, health and wellness initiatives, civic and social justice work, environmental projects, and humanitarian efforts that extend beyond the local community, Dougherty said.

“We stand on the shoulders of visionary women who planted seeds of service 40 years ago, and we remain dedicated to ensuring that their legacy continues to grow,” said chapter President Reba Blake, accompanied by a sea of members wearing the sorority’s signature green colors.