By Catherine Wilde
Staff Writer
Published April 9, 2008

With an almost $600,000 decrease in Closter’s budgeted surplus funds from 2007 to 2008, Mayor Sophie Heymann said the cause of the deficit are fewer building and construction projects in the borough.

The surplus in 2007 was $1,340,000 and for 2008 it is $750,000.

"The reason that the surplus is less than the previous year is because less was collected in the previous year because building and construction went down immensely," Heymann said.

She explained that the taxes that are incurred by new buildings are not part of the original budget so they go into the surplus.

"We can’t put anything into the budget we don’t already have in hand. We can’t plan on monies coming in to offset expenses. Each year we know new building generates taxes that is not part of the actual tax base on which the budget is based therefore each year that amount goes into the surplus fund," she explained.

However, the pattern for 2007 did not work to the borough’s advantage.

"Whereas in previous years we usually generate $1.3 or $1.4 million from these funds, which have not been previously allocated, in 2007 we only got some $750,000."

Heymann said the drop in construction mirrors a national trend but that "Closter … is mostly tear downs. We don’t have open land so it isn’t as if we could provide more… As a result of the national downturn in construction people are taking a second look before adding a porch or patio."

However, Heymann said the borough is in good standing with top-notch credit ratings and she stressed that officials cut expenses as much as possible.

"The change in surplus and change in state aid offset all the additional expenses we had. If we hadn’t lost revenue we cut enough of the anticipated expenses that we would have had a flat tax rate," she said.