Township CFO warns of $896,000 budget gap; committee told cuts or cap exception needed

Lebanon Township—CFO Lorraine told the township committee at a Jan. 15 budget workshop that preliminary numbers show a gap of roughly $896,000 between revenues and appropriations, prompting a discussion of steep cuts, borrowing or a formal exception request to the state review board.

Lorraine, the township chief financial officer, told elected members the draft includes $500,000 of fund balance as revenue but noted the township used $631,000 of fund balance in 2025 and now has only about $700,000—to—$800,000 remaining. "We have quite a budget gap this year," she said, adding that the appropriations side is about $400,000 over the state's appropriations cap and that the municipality must find approximately $400,000 in reductions inside the cap to avoid larger tax increases.

The gap reflects several large cost drivers, officials said. Lorraine highlighted a jump in medical insurance expenses from $684,500 last year to $828,900 in the preliminary 2026 budget, about a $144,000 increase she attributed to higher state plan rates and modest employer contribution shifts. The police department—-- the township—'s largest operational budget line—-- also rose, with salaries and wages increasing by roughly $200,000 and total police appropriations moving from about $1.3—million to $1.5—million in the draft, Lorraine said. Public works spending rose, too, to cover drainage and stormwater management, and the township increased its salt appropriation amid public-safety needs.

Committee members discussed options. One approach is line-by-line cuts to shave $400,000 from appropriations within the cap. Lorraine described another path: applying to the Local Finance Board for an exception to exceed the appropriations cap, but warned that an approved application would invite greater state scrutiny of the township—'s finances. "You could make an application to the local finance board," she said. "They would make the determination as to whether or not you will qualify."

Capital plans also affect the totals. The draft includes a larger capital program this year because the committee is setting aside $250,000 per year toward a new fire truck that has already been ordered; Lorraine called the truck "authorized but not issued debt" because payments are not yet due during the vehicle—'s multi-year build.

Residents raised procedural and technical questions during two public-comment periods. Resident Bill Bone urged caution about merging boards and asked about long-term revenue assumptions. Another resident asked whether improving tax-collection rates could reduce the township—'s required reserve for uncollected taxes (the RUT), which Lorraine said is currently calculated to protect the township while it forwards school and county levies. "If our tax collection went from 96% to 98%," Lorraine said, "then we could potentially reduce that reserve."

Laurie Hoffman, a resident who spoke near the end of the meeting, praised Lorraine—'s presentation: "I've been to many budget hearings and you explained it so nicely," she said.

What happens next: Lorraine asked committee members to review departmental appropriations and identify potential reductions; she said she will update figures as year-end reconciliations close and will research the Local Finance Board application process with the auditor. The committee scheduled further budget work at its next meeting to attempt to find the necessary inside-the-cap reductions or decide whether to pursue an exception or other measures.

(Reporting note: quotations and figures are taken from the committee's Jan. 15, 2026 budget workshop. Where the transcript used a single name without a surname, the report uses the role/title supplied in the meeting.)