The challenges and impact of the world pandemic known as COVID-19 invaded every facet of society in big and small ways.
Although we begin this year with the knowledge that there is a vaccine to fight this deadly virus and hope that a better day will be upon us sooner rather than later, the pandemic’s effects and impact leave many unanswered questions and our financial future unclear.
In crafting this budget, we are mindful of the uncertainty, and, therefore, our approach is best described as remaining calm in the “eye of the storm.”
In the coming months, and most likely longer, the short term and long-term negative impact of the pandemic will reveal itself to us. These are truly unprecedented times as we enter into 2021.
In 2020, the revenue consistently generated through municipal operations decreased significantly due to the pandemic, and we expect the same to continue well into 2021.
Also, we anticipate a significant decrease in commercial ratable and tax collection overall. Once these factors become real and quantifiable, they will dictate our approach in crafting the 2022 budget. For now, we hold.
There will be no new capital projects (except for our annual road improvement program), and staffing will remain consistent with 2020 levels.
With fiscally prudent financial planning over the years and successfully implementing sustainable measures that reduce operational costs, along with a strong grant-game, new commercial ratables coming online this year, the sale of long held unproductive township owned land, and a commitment to provide some relieve to the taxpayers of this community, the recommended 2021 offers a 0% tax increase.
The recommended municipal tax rate for 2021 remains .597 [“.597”], which represents a zero percent tax increase [2% increase] (Figures in [ ] are 2020 amounts included for comparison.) One cent equals $464,978.48.
The amount to be raised by taxation in 2021 is $27,760,451.69 [$27,644,378.44], which is $116,073.25 [$937,422.52] over 2020, the 2021 increase is attributable to the increase in assessed valuation, not via increased tax rate.
The levy cap bank available from 2019 and 2020 is $437,594, and we will use $0 to remain within the 2% tax levy cap. Note: The 2021 recommended budget is $1,055,263 under the levy cap and is available for “banking.” This addition to the 2019 and 2020 banks will leave a usable “cap bank” of $1,492,858 for future budgets.
The 2020 year-end surplus balance is $17,162,489.74 versus a 2019 year-end balance of $16,983,267.36, an increase of $179,222.38.
The surplus balance remaining available after applying an amount as anticipated revenue will be $10,312,489.74 [$10,133,267.36], an increase of $179,222.38 over the 2019 remaining balance.
The cash reserve balance for tax appeals is $4,119,491.18 [$4,119,491.18].
The decrease in outstanding debt continues. The 2010 closing balance was $30,797,000. The 2020 closing balance is $11,237,701.88.
Fiscal strength is evident as $6,850,000 in surplus (also known as fund balance) used in the 2021 budget has been regenerated at the close of 2020, with an increase from the 2019 year-end fund balance of $17,162,489.74 from $16,983,267.36.
Fund Balance is the excess in the following balance sheet categories: amount to be raised by taxation, miscellaneous revenues anticipated (MRA), delinquent taxes, prior year appropriations lapsed and miscellaneous revenues not anticipated (MRNA).
In 2021, our recommendation is to utilize $6,850,000 in surplus,$14,017,682.80 in MRA, $830,000 in delinquent taxes and $27,760,451.69 in amount to be raised for taxes.
The total of these balance sheet categories equates to the municipal budget of $49,458,134.49.
The level of appropriations in the 2021 recommended budget was considered when shaping this budget, all within the statutory limitations placed on revenues and appropriations.
Kevin Nerwinski, a longtime resident of Lawrence, serves as Lawrence Township’s municipal manager.