Recha Oktaviani via Unsplash
By JAIMIE JULIA WINTERS
winters@montclairlocal.news
The following story has been edited since its initial publication at MontclairLocal.news and in Montclair Local’s print edition, to clarify and correct several figures. See notes on changes at the bottom of this post.
Montclair administrators have been meeting with the heads of the township’s police department, recreation department, library and others on their own budgets for 2022 — working toward formulating the municipal budget that will ultimately determine how much needs to be raised in taxes.
Montclairians face some of the highest property taxes in the state. The average residential total tax bill in Montclair — including county, school and municipal taxes — reached $19,936 in 2020, compared to the state average of about $9,100, Councilman Peter Yacobellis said at a webinar he hosted Jan. 26.
The presentation gave a top-level overview of major spending, using information posted to Montclair’s website as its primary source. That includes a version of the 2021 “user-friendly budget” posted to the site, montclairnjusa.org, under the menu entry for “government,” and then “financial information.” The version that has been available there is the one introduced during last year’s budget process, not the final adopted version. Township spokesperson Katya Wowk told Montclair Local Feb. 3 that appeared to be an unintentional omission and that she’d reached out to the finance department to get a final version to post.
That document includes, among other things, a breakdown of spending through various “lenses” not listed the same way in the formal budget — such as how much is spent on personnel, or for various departments. It also includes a sample of an average residential tax bill (using 2020’s figures for an example), showing how much of the overall tax rate goes to separate budgets for the municipality itself, Essex County, the public school district and Montclair’s library (which is allotted a certain guaranteed minimum amount of funding under state law, though the township typically allots further funds for the library in its own budget). That breakdown is the first of the various lenses — found on a sheet labeled UFB-1.
Montclair’s tax base relies mostly on residences, which make up 90% of all taxable property in the township, Yacobellis said in his presentation (the UFB more specifically breaks that out as 85.03% residential, and 4.62% apartments). Only 10% of properties in Montclair’s tax base are commercial or industrial, the latter accounting for less than 1%. By contrast, commercial and industrial properties made up 25% of Clifton’s tax base in 2017, and make up 16% of West Orange’s, 17% of Millburn’s and 32% of Morristown’s, according to the presentation.
In Montclair, most of a property owner’s 2021 tax bill — 57.23% — went toward schools, Yacobellis said, citing a sample residential tax bill at a rounded figure of $20,000 as an example.
The municipal portion made up 25.87% — 24.7% for the municipal budget itself, and another 1.18% for the required allotment for the library, according to Yacobellis’ presentation. That figure does not include school debt service, even though the debt service is listed in the municipal budget (because until recently, Montclair was a Type I school district, where bonding for schools was handled by the township government; the public schools in November became a Type II district, which will take on debt for future bonding directly). That debt service was accounted for in the 57.23% for schools.
(Equivalent figures laid out in the 2021 UFB vary slightly from Yacobellis’ presentation, though the proportions are similar. The 2021 UFB uses 2020, rather than 2021 itself, to illustrate the breakdown among municipal, school and county spending, and breaks some of those categories down further).
In 2021, the library ultimately was budgeted about $3.1 million — $2.68 million in the portion required by state law, and another $420,000 of discretionary funds in the municipal budget. In November, then-library director Peter Coyl told Montclair Local that for 2022, the statutory amount the library will receive has risen to about $2.8 million, but the library is also requesting another $385,792 in discretionary aid, for a combined total of about $3.185 million. Interim director Selwa Samy said that the library board of trustees has been discussing submitting an updated draft budget this month with a bit of a higher ask than the initial amount presented to the township in November.
It remains to be seen what level of funding the Township Council will provide. It’s recently considered a proposal to withhold discretionary funds unless the library agrees to more municipal oversight of its operations, but some council members have objected to that plan; so far, no action on it has taken place.
The county funds all maintenance on Montclair’s county roads — Grove Street; Valley and Orange roads; and Bloomfield, Upper Mountain and Watchung avenues; and five parks in Montclair. The county additionally maintains several parks, runs elections, offers health services, has a sheriff’s office and has a health department.
After three years of flat municipal taxes, in 2021 homeowners saw a 2.48% increase in the municipal portion of their property tax bills. School taxes (2.19%) and county taxes (2.20%) also rose.
In Montclair, it’s the township manager, Tim Stafford, who first formulates the budget. The Montclair mayor and council will enter into budget discussions in the next few months, with a version of their plan eventually presented online in the initial version of the user-friendly budget, and with department head presentations at council meetings.
In 2021, Yacobellis said, 31% of the dollars from the municipal portion of a resident’s tax bill go to public safety.
An initial look at the UFB would seem to show a different figure — with $26.3 million, or 28.1% of an overall $93.8 million 2021 budget, for public safety. But Yacobellis, in a message to Montclair Local Feb. 3, clarified that’s because the calculation in his presentation omits $8.6 million in debt service school debt service from the total budget. The $26.3 million amounts to 31% of the remaining $85 million — the portion under the municipality’s direct control. “This presentation was about our power to collect and spend tax dollars and the people’s power to influence that process,” Yacobellis said.
The public safety costs include salaries for police officers and firefighters, but not all personnel costs; some of those are reflected in separate categories in the presentation as well as the UFB.
Groups such as Montclair’s Beyond Policing have called on the township to move some of the funds to other departments such as Health and Human Services — saying experts there should respond to abuse cases, mental health calls and alcohol- or drug-related cases — and to pay for restorative justice programs.
A statutory expenses category — which includes pensions and payroll taxes — accounted for 12% of the example tax bill, Yacobellis said. Health and liability insurance for all employees accounted for another 9%, he said. Debt services accounted for 11%, and public works made up 7%.
Joining Yacobellis for the presentation, Brigid D’Souza — a licensed CPA and assistant professor at St. Peter’s University who writes and teaches about local, public finance and how taxpayers can navigate local public budgets — noted the UFB also breaks down the budget in other ways. One sheet, labeled UFB-7, shows all together, personnel costs (including the wages, statutory expenditures and health benefits) amounting to $60.7 million in 2021.
Of that, more than $19.9 million went to police personnel costs for 110 officers, and more than $14.1 million for 83 firefighters, according to the UFB. Another $3.6 million went to supervisory staff, $20.6 million to various union employees and $2.3 million for non-union employees.
The mayor and six members of the Township Council, as part-time employees, collectively cost the township a little under $137,000 in the municipal budget — though the UFB reflects that just $49,100 of that pays for their base pay.
Yacobellis had said during the presentation the seven governing body members each are paid $10,000. Wowk told Montclair Local that their base pay does collectively cost the township $70,000, but some of that is paid through parking, water and sewer utility budgets.
Another user-friendly budget sheet — UFB-2 — shows how revenues break down. For instance, in 2021, anticipated revenues included $2.96 million in state aid and $4.9 million in payments in lieu of taxes for new construction. Township officials said last year that they saw significant decreases in permits and fees, licenses, parking revenue and court fines during the pandemic.
In 2021, the township anticipated using much of its surplus — $9.45 million — in part to offset some of those losses. In budget discussions last spring, township officials said that would leave $6.5 million in the surplus fund.
In 2021, $59.7 million was raised by taxes of the total $94 million municipal budget, D’Souza said in the presentation.
D’Souza suggested that residents tune into upcoming budget presentations to discover what their tax dollars fund in the way of services, how payments In lieu of taxes, shared services and debt play into the budget and these items have changed over the years.
Update, Feb. 3, 11 a.m.: An initial version of this story incorrectly listed a tax rate for statutorily required library funding separately from a figure Councilman Peter Yacobellis described — 25.87% — as the municipal portion of a tax bill; the figure is inclusive of the library tax rate. A reference to how much money the township anticipated leaving in its 2021 surplus fund has been corrected. Some figures based on previous reporting that appear to conflict with those published in the user-friendly budget or presentation have been removed.
Update: Feb. 3, 10 p.m.: This story has been further updated to clarify statements Yacobellis made about percentages of a 2021 tax bill, and how they connect to major spending (for instance, what amount of a tax bill goes to pay for public safety). After initial publication of this article, Yacobellis clarified to Montclair Local those proportions were meant to be relative to the 2021 municipal budget after removing $8.6 million in school debt service from the approximate $93.8 million total, as the municipality does not control that spending. This story was further updated to adjust the incorrect statement that Yacobellis was citing a 2020 tax bill; his breakdown was meant to be for 2021 (his presentation’s slides about the breakdown hadn’t specified it was for 2021, but included a graphic that recurs through the presentation instead showing the average tax bill for 2020).