Silvestri Talks 2012 Budget

What are the 2012 changes to the Earned Income Tax, and how do they affect you and the neighborhood in which you live? Township manager Michael Silvestri addressed these, and other, concerns at last week’s budget workshop in the caucus room of the municipal building.

Last week, he and his assistants, Paul Lauer and Tom Gromek, addressed the press with the key elements to the township’s proposed 2012 budget, which compensates for the expected impact of the Earned Income Tax changes and, as written, does not include any tax increases at the wallets of residents.

The changes to the Earned Income Tax, Silvestri explained, are state-made and state-wide, reducing the number of Earned Income Tax collection agencies from 550 to 69, where the tax is now collected on a county-wide basis rather than by municipalities and school districts as it had been done in the past.

He said that this change will affect every employer and employee, many of which may not know that the change gives employers the duty to withhold the tax.

What’s more, Silvestri continued, because many residents work outside of Washington County, the tax monies will not come to the township as quickly as they otherwise would, providing a 20 percent gap in monies that would be received in the fourth quarter of 2012, but that won’t, under the new law, be received until first quarter 2013—resulting in a hit of approximately $820,000.

Though Lauer said that the money will end up rolling in to the areas to which it is due in the form of future Earned Income Tax, he said that the postponement of funds places a burden on the township that is new, given the township’s history of aggressively collecting this tax and pursuing and deviations in collection.

The effect of the Earned Income Tax was expected when drafting the proposed budget, Silvestri said, as were the 35 percent pension increases for , such as and .

Another expected cost affecting the budget was the continuation of capital projects, like the turf and lighting projects and work on the , which join the Clay Tennis Court renovations as substantial Parks/Recreation costs.

Also, Silvestri sited road resurfacing as a big factor in the proposed budget, as well as improvements to parts of the government building, including the HVAC system, generator and energy improvement and insulation.

Recurrent expenses put the township at approximately $676,000 over revenues.

What revenues did come into the township, in part, accompanied the sales of roughly 74 new homes and large-sale real estate transfers, the latter of which brought in $1.385 million alone.

Silvestri said that the average projected earned, as opposed to total, household income for the year was $125 and that he puts it at $127,900 for next year, a number which indicates that people in the township are working more and making more money.

And one person will be working more as a municipal employee next year. Silvestri said that he expects one full-time employee to be hired in the , setting the total number of people in that department at 16.

In other staffing news, Silvestri said that the public works labor agreement expires at the end of April 2012, and will have to be renegotiated at that time.

The budget is scheduled for adoption on Dec. 19, 2011, with a public hearing to be held on Nov. 21. Detailed line-items can be found on the township’s website.