Preliminary budget forecasts $81 tax hike

City Council introduced a 2017 municipal budget on Monday night that estimates an average tax increase of about $81, or 2.4 percent, on the average Rahway home.

A public hearing and final vote on the $54.18 million spending plan is scheduled for the City Council’s June 12 regular meeting.

The average home in Rahway is assessed at $133,000 and paid about $3,350 in municipal taxes last year, based on a tax rate of $2.519 per $100 of assessed value. The estimated tax rate in the 2017 budget would be $2.580, projecting for average municipal taxes of $3,431 — an increase of $81. For a property assessed at $266,000, the increase would be about $162.

This is only the municipal portion of the tax bill and does not include the school portion or the county portion.

New Church landscapeAbout $66 of the average $81 increase is a result of the budget impact while an estimated $15 is due to a loss of ratables, according to Chief Financial Officer Frank Ruggiero. The loss of ratables primarily is likely the result of the state Blue Acres program acquiring and razing flood-prone properties. Last year, the state bought out at least 20 properties, many along New Church Street and Central Avenue, and demolished them earlier this year. The state now owns that land and obviously does not pay taxes on it while the city will maintain it.

The 20 properties had a total assessment of about $2.556 million, with property taxes totaling almost $162,000. About $149,000 in tax revenue is generated for every $13.30 in municipal taxes on the average home, so the estimate of about $15 is in line with those figures.

The city’s net valuation taxable is down from $1.457 billion in 2016 to a proposed $1.45 billion in 2017.

Total spending is up about 1.66 percent, from $53.3 million to $54.182 million. Revenues are up less than 1 percent, from $16.59 million to $16.741 million. The total tax levy — the amount to be raised through property taxes — is up about 1.98 percent, from $36.709 million to $37.441 million, making up about 69 percent of the revenue side of the budget.

Total salaries and wages were up about 1.99 percent, from $21.739 million to $22.172 million. Total debt service was essentially flat, $6.235 million last year compared to a proposed $6.248 million this year. Other expenses within departments actually will see a decline of 1.27 percent, from $16.298 million last year to $16.091 million in 2017.