Municipal taxes will rise by an average of $149 in Rahway after two years without much of an increase.

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City Council unanimously approved the municipal budget during its regular meeting on June 12 after introducing the spending plan at its May meeting. There were no comments or questions from council members and only one question from the public about resolutions that amended the budget (AR-153-23). The 2023 municipal budget is available in its entirety here.

The average assessed home in Rahway ($133,000) would see the municipal portion of their tax bill rise by about $149, or about 4 percent, after remaining essentially flat in 2022 and 2021. The municipal budget makes up about one quarter of the overall tax bill, with the school portion accounting for about half, and the county another quarter.

The $64.962 million budget is up about 5 percent from $61.86 million last year. The tax levy – the amount to be raised through property taxes – is slated to be $40.13 million, up from $38.299 million, a difference of $1.836 million or about 4.8 percent.

The tax rate for 2023 is expected to be $2.825 per $100 of assessed value, generating municipal taxes of $3,785 for the average home, up from $2.713 in 2022, or $3,636.

The budget anticipates an additional $500,000 in revenue through surplus from the Water Utility, up from $750,000 in 2022 to $1.295 million and surplus from the Parking Utility anticipated to be almost $1.1 million this year, up from $675,000 in 2022.

The 2022 municipal budget included $1.921 million in American Rescue Plan (ARP) funds from the federal government.

Other items on the revenue side that might be of interest:

• Uniform Construction Code fees were anticipated to be $675,000 in 2022 and in 2023 but the city realized $1.987 million in 2022.
• The Vacant/House Foreclosure Registry realized $297,000 after budgeting $161,050 in 2022, the same amount that’s anticipated in 2023.
• Hotel fees collected were up, from an anticipated $192,000 to $244,475 in 2022, so this year’s budget anticipates $244,000.

There’s also a $300,000 budgeted as a reserve for tax appeals, which the the 2022 budget did not. The city reserves funds to refund tax appeals so there is not a large one-time expense to taxpayers, according to Chief Financial Officer Frank Ruggiero. As the assessor’s office negotiates favorable settlements, portions of the reserves can be liquidated for tax relief, he said.

On the expenses side, there’s a big increase for financial administration (Treasury), from $744,000 in 2022 to $1.288 million in 2023. Ruggiero said the increase was the result of “serious increases” in computer network security, hardware, software, and monitoring services – “none of which are bondable expenses.”

Look for future posts on the municipal budget, including my annual look at anticipated revenues from Payments In Lieu Of Taxes (PILOT) in the budget.

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