Slight Tax Increase Projected in Chatham Borough

Chatham Borough Councilman James Lonergan said borough residents could face a tax rate increase of between 1.5 and 2.5 percent.

The borough has felt the pinch of several declines in revenue, Lonergan said, including a decline in the tax base, decline in state aid and a decline in the reserve for uncollected taxes.

"We've tried to make up the difference," Lonergan said. Because the tax rate increase is limited by the state, that difference has usually been made up through user-based fees, such as water and sewer rates.

The reserve for uncollected taxes has also helped fill the hole made by the economic decline. Now, Lonergan said, the borough has to replenish the funds.

"This is one of the things the credit agencies look at when they give out ratings," Lonergan said, and holding on to a good credit rating is important with the economy barely starting to turn around.

2012 also presented other, unforeseen challenges that will have to be absorbed by the 2013 budget, including Hurricane Sandy and ongoing litigation, especially against TriCare.

The borough's anticipated budget for 2013 is $13.43 million, a slight increase over the 2012 budget of about $13.42 million.

"We're waiting for the auditors to send their statements," Lonergan said, "but we're shooting for an tax increase betwen 1.5 and 2.5 percent." Without Hurricane Sandy and the ongoing litigation, "we probably would have had close to a zero percent increase," Lonergan said.

Sewer rates will increase by two cents, from $3.45 per cubic foot to $3.47 per cubic foot.

A full presentation of the budget will be made on Feb. 25, Lonergan said.