League of Municipalities Convention

I attended for one day this year. I attended a session named "Real Property Tax Reform - How do we get there." Professor Ernie Reock from Rutgers led off led off and told us the bad news we already know - New Jersey is a leader in taxation. He listed principles to follow for tax reform - tax changes need to be broad based, progessive and shifted away from property tax. He felt that an increased sales tax is a good way to replace property taxes. It tends to hurt people at the lower end of the earning spectrum and he said this can be corrected by exempting items such as clothing and over the counter medications. Dr Reock was following by three state legislators. There was a fair amount of rhetoric and not much substance. The highlight was Jon Bramnick saying that municipalities have done a better job of budgeting than state government because they are forced to make hard decisions every year and the state can defer its problems year after year. He urged the audience not to send its money to Trenton. Another legislator advocated an increased gas tax as long as the revenue is dedicated to the Transportation Trust Fund. I agree with that.

The most useful session for me was "Doing Less with Less - Prioritizing Needs and Staffing". I knew this would be good because the moderator was Reagan Burkeholder, the retired City Manager of Summit and instructor of the class for newly elected officials in New Jersey (I took his course 7 years ago). Reagan is active in the national movement to use comparative performance measurement to improve the performance of municipal government. This approach is currently used in only 12 of the 566 towns in New Jersey. Plainfield is not one. We did take a step in the right direction thanks to Annie McWilliams who required Plainfield division heads to use goals, objectives and data when they made their presentations recently at the Council's budget hearings.

Here is what Reagan had to say:

1. from 2004 - 2009 the average NJ municipal budget
* grew 4.9% per year
* surplus shrank .4% per year
* non property tax revenues few 2.5% per year
* delinquent taxes grew 4.7% per year
* taxes grew 7.6% per year

2. the experts projections for 2010 - 2015
* total revenues will grow 2.3% per year
* surplus will continue to shrink
* delinquent taxes will grow 3% per year
* taxes will grow 2.5%/yr (this accounts for the 2% tax levy cap and exemptions)

3. The outcome: without a drastic cutback, expenses will exceed revenues by 15% after five years. Not all municipal expenses are under the control of local elected officials. So 80% of the budget would have to be reduced by 20% over five years.

Imagine what that would do to Plainfield city government. If we do business as usual, it would not be possible to maintain our public safety staffing at current levels.

4. What to do:
* decide what services are needed
* least expensive way to provide them
* much more engagement and education of citizens in the budget process
* comparative performance measurement - how do we stack up against other towns
* 3 year budgeting
* engage employees in discussion of how to save money and improve services

A panel of city administrators and CFOs spoke about initiatives in their towns. The highlights:
* two towns share overnight police patrols
* once a week trash pick-up
* talk honestly and early about lay-offs in all departments
* apply credit card company business practices to the tax collection office
* combine divisions with city government to share administrative support staff:
examples - planning and economic development
- city administrator and city clerk
- recreation and health
- finance and tax collection