Ratables Make Big Difference in Borough Taxes

Falling assessments and flat ratables play a big role in the in .

"Think of the township," Council President James Lonergan said. "There's an interesting mix of big-sized properties, ranch houses and larger houses. A lot of people are knocking down small houses on big properties and turning [them] into bigger houses."

As a built-out community contained in two miles squared, the borough does not have those same opportunities for development.

"Chatham Borough doesn't have a lot of large properties. Even when you knock down a house, you can't build a bigger house," Lonergan said.

Ground area is not the only restriction homeowners face. The borough has limits on not only how much area of a lot a home's floor plan can use, but also restricts how tall homes can be relative to the ground area.

has similar restrictions, but property sizes tend to be larger in most of the township. Homeowners, therefore, can add to their home sizes by putting on additions or another floor.

In the borough, though, "you can't build out or build up very far," Lonergan said. "You can maybe put in a new floor or renovate your kitchen, but how much does that really add to your home value?"

And if those improvements do not substantially add to a home's value, it does not increase the home's assessment or how much the owner pays in taxes.

"For the first time last year, we didn't gain anything on the ratables. All the work people did on houses was lost by [other] people and businesses who had their properties reassessed," Lonergan said.

Utility Usage and Costs

The borough also lost money on .

"Think about how incredibly wet last year was," Lonergan said. "People used a lot less water, which earned us less revenue [there] ... and sewer usage is driven by water usage."

In 2008, when the economy's downturn was at its most drastic, the borough's debt service was very low. As a result, the borough was able to lower usage costs for water and sewers at that time.

"From the consistency of keeping things level, that shouldn’t happen," Lonergan said.

Now it makes the increase in those utilities seem drastic. "Debt service is up significantly from 2011," Lonergan said of the water rate, but over time "I would bet that rate is going to start moving up to closer to what it was in 2007."

The tables below show water and sewer usage rates in Chatham Borough since 2008.

Revenue

"A numbe of [revenues] continue to decline," Lonergan said, leaving the borough with little choice but to increase taxes and prices.

The borough's budget proposal for 2012 includes a seven percent tax levy increase. The increase is within allowable exceptions to the two percent tax levy cap, which include pension and health care costs and capital improvement.

The borough will also raise parking fees for municipal lots in 2013. The table below shows the 2012 and 2013 parking rates.

With little areas left to cut, "we have to think of new ways to raise revenue. We've got to stop the slide, and hopefully with some of these increases, if we can hold the line on expenses," Lonergan said residents could see a future impact on taxes and the municipal budget.

However, he continues to urge understanding for the tax levy increase this year. "There are things that are just way outside our control, that we just can't control," he said.