WESTFIELD – The City Council is slated to continue the public hearing on the tax levy tonight, but may not vote to set the shift differential which is a key factor of setting the city’s residential and commercial tax rate.
The council’s Finance Committee has slated a 5:30 p.m. session to discuss a number of issues pertaining to establishing a tax levy, but that discussion may be deferred to the council’s Dec.5 meeting because the state Department of Revenue has yet to approve the city’s free cash number, projected at about $3 million.
Free cash is money in the previous fiscal year budget that was not incumbered, and unanticipated revenue for that previous budget year. The DOR has to certify that those funds are not required to balance the previous fiscal year accounts.
Mayor Daniel M. Knapik said yesterday that the city has not completed its process of verification, information needed to be given to the DOR for its certification review, because of a manpower shortage in the Auditing Department due to long-term illness of personnel directly involved in that process.
Knapik said that he anticipates submitting information to the City Council, needed for the legislative branch to act on the shift factor and tax levy, at the Dec. 5 meeting.
Knapik said that he may opt to request the City Council to use stabilization funds to reduce the tax levy and move free cash funds later in the year to replenish that stabilization account.
Knapik said that he is still studying the city’s financial needs to determine what tax increase, under Proposition 2 1/2, he will submit to the council for discussion during the setting of the tax shift, levy and tax rate.
The City Council voted at the Nov. 7 meeting to continue the public hearing on the shift factor between residential and commercial tax rates to tonight’s session. The council took that action because there were no speakers in the Council Chambers to argue to move the shift to benefit residents or businesses in the tax rate.
Currently the residential tax rate is $16.72 per $1,000 of property value and the commercial, industrial and personal property rate is $31.09 per $1,000 of property value.
Free cash or stabilization funds have been used in recent years to lower the amount of revenue raised through the tax levy. Last year the tax levy was set at 1 1/2 percent instead of the maximum 2 1/2 percent allowed under state law.
