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Proposed Butler Budget Calls for $78 Tax Increase

Council concerned that state keeps most of the utility receipt taxes collected by the local electric company.

The introduced a $10.48 million 2012 budget Tuesday that calls for a $78 property tax increase on the average assessed home.

Council President Edwin Vath said the budget was affected by the recent bad economy as the council saw a decrease in revenue from construction permits, less return on investments and an increase in debt service.

He said the budget’s tax levy is $34,312 below the state-mandated 2 percent cap.

The 2012 budget is supported by a tax levy of $6.3 million, which raised the tax rate from 80.7 cents per $100 of assessed value  to 84 cents. The borough's average home assessment is $252,000, Vath said.

The borough’s 2012 water utility budget is estimated at $1.89 million and electric budget was estimated at $28 million. The local library budget was estimated at $326,312 and calls for a tax rate of 4.3 cents, a drop from 4.5 cents in 2011.

Of greater concern to Vath than the tax increase for the municipal budget is the capture by the state of New Jersey in its 2013 budget of a larger share of the  Energy Receipts Tax collected by the Butler electric utility. Borough Administrator James Lampmann said that tax is charged against the utility's income as an offset for local property taxes for hosting the poles, wires and transformers needed to generate or distribute electricity, cable television or telephone service.

The Butler electric utility is charged about $2 million annually, said Lampmann. The state collects the funds and, by law, is supposed to return the money to the municipalities. The state has been keeping a growing share of the energy tax receipts to balance its budget, Lampmann said.

For 2012, the council included $982,902 in energy tax receipts.

“Imagine the tax relief we could provide if we got our full amount back,” Lampmann said.

He said the New Jersey League of Municipalities is lobbying on behalf of its members to get the state to return all the utility tax to the towns.

The council will hold a public hearing on the budget at its April 24 meeting.

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