Montgomery committee introduces 3.5% appropriation-cap ordinance after CFO warns of steep budget pressures

Montgomery Township's finance chief told the Township Committee on Feb. 20 that inflationary increases to health insurance, pensions, electricity and debt have already created roughly $750,000 in new pressure on the 2025 budget, and the committee introduced an appropriation-cap ordinance to give the township additional flexibility. "Health insurance is up 18 percent," Chief Financial Officer Michael Pitts said, noting that alone equates to about $400,000.

Pitts walked members through first-quarter property tax timing, state rules allowing limited budget transfers in the first 90 days and the township's annual debt statement, and described the appropriation-cap ordinance the committee routinely introduces each year. The ordinance, labeled 25-1749, would permit a 3.5 percent increase to certain "inside the cap" appropriations; Pitts said adopting the ordinance does not automatically raise taxes but provides a budgeting tool should the township need to increase specific operating lines.

Pitts said other drivers include a roughly 10.2 percent rise in police pensions (about $133,000), a 15 percent increase in electricity costs, and smaller increases in liability and other insurances. "We're already at that $750,000," Pitts said, urging members and residents to expect a tight budget season and noting the township will follow the usual schedule: budget introduction in early April and adoption at the first meeting in May if timelines hold.

Deputy Mayor Barragan and other members praised the township's transparency and the use of public committee review. Barragan said the finance and budget committee will continue meetings through March and encouraged residents to attend the budget hearing once the draft is published.

The ordinance was introduced on first reading and set for public hearing and final vote at the committee's March 6 meeting. The committee also discussed continuing capital planning and the optional use of a "cap bank" mechanism under state law if inside-cap appropriations temporarily exceed the limit.

The committee did not adopt the final budget at the meeting; Pitts said department requests and capital planning will continue through March and that he and staff will present the draft budget for public review when ready.