The total budget increased from $19,443,641 in 2007 to $19,692,669 this year, a $249,028 increase. However, the tax levy, the amount of money the borough must raise through property taxes, increased just $11, from $12,638,041 to $12,638,052.

In 2006, the average property owner paid $2,110 in taxes. The 35.8-percent spike could be traced to a revenue gap left in the wake of Cherokee, the EnCap-affiliated developer currently in court with the borough over a large housing project planned on Porete Avenue. The developer promised $2 million in impact fees relating to the project on Dec. 31, 2006, but withheld the money after the borough failed to follow through on its promise of condemning Porete businesses through eminent domain.

Earlier this week, borough officials anticipated a 3.75-percent increase in the tax levy. At the March 13 meeting of the mayor and council, the borough passed a resolution to spread out the tax collection rate over a three year span, saving the average taxpayer $68 this year.

In 2007, the borough collected 96.45 percent of its taxes. This shortfall was due mostly to unpaid taxes from one of the borough’s biggest taxpayers, Cherokee. Cherokee paid its taxes after the borough held a tax lien sale on the property.

Over the past three years, the borough collected an average of 98.03 percent of its taxes. The borough must set aside enough money in surplus to account for anticipated unpaid taxes each year. If the borough comes up short, it must reserve twice as much money the following year.

Councilman Richard Hughes questioned the rationale for putting less money in surplus. "If we eliminate this reserve for unpaid taxes, I’m worried that we’ll be in an untenable position come the beginning of 2009," he said. "We cannot trust Cherokee."

Hughes asked borough chief financial officer Judy Tutella whether she thought it was prudent to place less money in reserve. Tutella said if it were her decision, she would not risk it. "I’m not a councilperson and I’m not a taxpayer in North Arlington," she added.

Massa did not think collecting taxes from the developer would be a problem this year. "I don’t expect that Cherokee would allow North Arlington to move forward with a tax sale," he said.

The borough voted unanimously to approve the resolution and place less money in reserve.

State Senator Paul Sarlo commended the borough on its budget and pledged to fight for more aid to the tax-burdened borough. "It is a bare bones budget," said Sarlo.

The state budget proposed by Governor Jon Corzine proposed slashing Consolidated Municipal Property Tax Relief Act (COMPTRA) funds, state money given to town governments. Sarlo said he would not support Corzine’s budget unless it included COMPTRA aid. "You cannot allow your municipalities to go cold turkey and cut off their base aid," he said.

Councilman Steve Tanelli and Mayor Peter Massa thanked Sarlo for his support. "Extra money to a small municipality like North Arlington counts," said Tanelli.

Sarlo also said he would support a request for extraordinary aid should North Arlington seek it. However, the borough pulled a resolution to apply for extraordinary aid. North Arlington would not qualify for extraordinary aid, aid given to municipalities from the state to plug "extraordinary" budget shortfalls, because they expect a zero tax increase. Last year, the borough received $500,000 in extraordinary aid.

Small cuts of $5,000 to $10,000 were spread evenly across the budget in every department. Increases came from fixed costs such as pensions, which jumped $220,000 for borough workers and the police, and legal costs, which jumped $350,000 in anticipation of an increase in legal activity due to litigation with Cherokee. Health benefits and prescriptions increased 7.8 percent, according to Borough administrator Terence Wall.

"We put the borough back on the path of fiscal responsibility. I heard the cry from the homeowners who were upset with the size of last year’s tax increase," said Massa.