City's State Municipal Aid Reduced by $721,230

Summit will be receiving $721,230 fewer dollars in state aid than it did in 2009.

The New Jersey Department of Community Affairs' Division of Local Government Services released its certification of state aid for the 2010 calendar year and 2011 fiscal year budgets. Grouping Summit in "Aid Group 3," the city was subject to a 23.45 percent reduction.

That meant that instead of the $3,744,487 Summit received for the prior year, the Hill City will be getting $3,023,257 this time around. A true 23.45 percent reduction would have meant a loss of $878,082. However, Summit has $156,8523 in "harmless transfer" money from a tax on the electric bill that the state cannot take back at this time, making the final reduction $721,230.

When you add this reduction in state aid to the $800,000 common council was already slashing from the proposed budget to keep the tax levy increase to 2 percent, the city will have to cut $1.5 million total from the proposed budget.

Through budget workshops, common council has already heard how an $800,000 reduction would effect the police and fire departments and the Department of Community Services. Both Police Chief Robert Lucid and Fire Chief Joseph Houck detailed layoffs and Director of DCS Beth Kinney said curbside recycling pickup may have to end.

Council president Dave Bomgaars said the council will not ask the departments who have already presented thier budgets to re-do them. It will be the council's discretion where the additional $721,230 will come from.

There were nine different aid groups, each with a designated percentage reduction. Group 1 towns had budget reductions of 26.45 percent, while Group 9 towns were reduced by 14.45 percent. Summit fell in the third-highest reduction group, which was the second most common grouping in the state, holding 123 municipalities, or 21.7 percent of the state.

The principle used by the state in determining the reductions was that municipalities with higher wealth and lower taxes can absorb more of an aid reduction than a municipality with low wealth and high taxes. According to the Group 3 designation, Summit was classified as having high taxes and high income.

Each municipality was classified as either a low, medium, or high tax rate town, and as either a low, medium, or high income town. Towns with the 26.45 percent reduction were classified as "low rate/high income" and towns with the 14.45 percent reduction were labeled as "high rate/low income." Only 2.8 percent of municipalities were given the lowest reduction and 4.2 percent were given the highest.

The most common grouping in the state was "medium rate/medium income," with 248 municipalities, or 43.8 percent of New Jersey, receiving a 20.45 reduction.

The following is a break down of nearby municipalities. Listed is how much aid was reduced and where the town was grouped.

• Chatham Borough – $176,853 reduction – Group 3 (23.45 percent reduction)
• Chatham Twp. – $240,931 reduction – Group 3 (23.45 percent reduction)
• Millburn – $704,016 reduction – Group 3 (23.45 percent reduction)
• Springfield –$450,738 reduction – Group 5 (20.45 percent reduction)
• Westfield – 941,470 reduction – Group 3 (23.45 percent reduction)
• New Providence – $366,673 reduction – Group 4 (21.95 percent reduction)
• Madison – $227,383 reduction – Group 4 (21.95 percent reduction)

Continue to check Summit Patch for updates on what the reductions will mean to the city.