It's Payback Time In Middletown: So Far Township Facing $4 Million Budget Shortfall For 2010 - Layoffs Pending

I attended the Middletown Township Committee Workshop meeting last night to hear what would be said about the Emergency Appropriation Resolution 09-277.

This resolution was for the purpose of borrowing ~ $1.5 million from next years budget to pay for worker's compensation claims and other employee medical benefits that the township did not budget for this year.

There was a lively discussion on the subject that lasted nearly an hour. Committeemen Sean Byrnes and Patrick Short questioned the Township Administrator about how and why, with less than 30 day left in the calendar year, did the township find that it needed to borrow such a large amount of money against next years budget when the projected budget for next year was already a few million dollars short.

The simple answer was the Township did not foresee that worker's compensation claims and other employee health benefit claims would be at such a level as to need more money than budgeted for in the previous year's (2008) budget. And after all, the bills needed to be paid.

The money that was set aside this year for health benefits and claims was ~ $2 million less than last year. The reason being was because recent trends over the past several years showed that health claims rose and fell from one year to next. With this in mind, the powers that be who shaped the 2009 budget decided to gamble on the trends downward slope and under funded the Township's health care plan.

In the 2008 budget ~ $6 million was appropriated for benefits but at the end of the year, much like this year, an emergency appropriation 0f $500,000 was needed as opposed to an ~ $1.5 million. I would say that their gamble did not pay off.

Committeeman Byrnes was relentless in his questioning and would not support the resolution as written without assurances from the rest of the committee that further review of township finances would be made before the end of the year. To get these assurances Byrnes only agreed to support a resolution for $800,000 of the $1.5 million emergency appropriation at last nights meeting. The other $700,000 will be appropriated through a new resolution at the December 21st committee meeting if Byrnes receives proper answers to his questions about how next years budget will be addressed.

The reason why Sean Byrnes is being such a stickler over the 2010 budget is because at this present time it is being projected by the Township Committee, that there will be a minimum of a $4 million shortfall in revenues next year with this resolution and by the time January or February comes around it could be a couple of million more dollars short.

When Byrnes pressed the Township Administrator over what plans he intends to present to the Committee to curtail costs next year the administrator, Tony Mercantante said that among other things, plans were in the works for employee layoffs starting in either January or February of 2010 but paper work must first be filed with the State before any layoffs could take effect.

With this in mind I have to ask once again, why not listen to Sean Byrnes and establish a nonpartisan Finance Committee that could identify problems like this in advance and work towards budget solutions before they become problems in the first place?