Towns Cut Back in Wake of Vote

What are people willing to live without in exchange for lower property taxes? For residents in a dozen towns in New Jersey, the answer is police officers, libraries, garbage pickup and senior services.

Ten months ago, New Jersey passed a law that requires voters to approve tax increases over a 2% cap, not including certain expenses. Voters Wednesday rejected nearly all these requests for more funds.

Of the state's 566 municipalities, only 14 towns even bothered to ask voters for an increase, and two of those were approved.

"We're going to be seeing the impact of those decisions, and they're gong to have a real substantial impact on the quality of services," said Bill Dressel, executive director of the New Jersey State League of Municipalities.

For decades, New Jersey property taxes have been the highest in the nation. A 4% cap implemented by former Gov. Jon Corzine helped lower increases to 3.3%, but it was criticized for having too many exceptions. In 2010, after major state aid cuts, average residential taxes increased 4.1% to $7,576.

Gov. Chris Christie signed the 2% cap into law in July, part of a compromise with the state Legislature. Costs such as health care, pension contributions, debt payments and emergencies aren't included in the cap.

The limit is on overall increases in property-tax collections—not individual homeowners' tax bills. If big companies leave a town, or if it loses money on tax appeals, other residents will have to bear the burden.

Mayors who asked residents to raise their own taxes said they had already made cuts wherever they could.

"I'm looking at shutting off streetlights," said Paul Bazela, mayor of Northvale. "At some point in time you can't run on a 2% cap. It's impossible. If you get too much snow, how do you stay within your cap?"

After the tax increase was shot down by a vote of 3 to 1, Northvale will have to cut off support to its municipal library, which will have to find private money to stay open, he said. Mr. Bazela said there are more cuts to come.

Shrewsbury Township will force its 1,200 residents to contract with a private trash collector to pick up garbage, after a request for nearly $43,000 more was shot down. The township faced a $45,000 increase in its waste-and-sewer-authority bill—untenable for a town with a $977,000 budget.

Shrewsbury Township had already done everything possible to keep costs down. It doesn't have its own police or fire departments, and most employees are part-time. A wage freeze would only save $1,200, though that hasn't been implemented yet. The garbage move would save $67,000.

"We had no more staff to lay off," said Addie Schmidt, the town's chief financial officer. "We're down to a skeleton crew."

The one extreme measure left—dissolving the town completely into another—would require approval from both towns. "The trouble is, nobody wants us," Ms. Schmidt said.

There was an upside. Those tough choices were made by the voters themselves.

"You had the chance," Mr. Dressel said. "We made the case and we put it before you and you voted it down."
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