Message from Councilman Matt Adams | October 6, 2022
Welcome to October! This Fall is a busy time for Scotch Plains. The dawn of the new season brings federal, state, county, and municipal elections, along with robust planning for the new year that is right around the corner. That means that the township’s administration and new Chief Financial Officer Christopher Macaluso, with input and direction from the Council, are hard at work on the 2023 budget.
Especially at this time of year there is, and should be, robust discussion about the direction of the municipality. We have 9 full months “in the books” to reflect on since 2022 began. At a time when talking points too often get substituted for actual data and statistics, it is critically important that the ongoing evaluation of the state of the township be done using objective facts, not opinion or conjecture.
I would like to highlight once such objective measure of the state of our town’s finances, a third-party report written by Moody’s Investor Service. Moody’s is a credit agency that, according to its website, provides international financial research on bonds issued by commercial and government entities.
Moody’s is fiercely independent; it uses its own proprietary research criteria to assess municipal bonds to help guide the fiscal strength of local governments. For cities and towns that enjoy strong bond ratings, like Scotch Plains, they can borrow money at considerably lower interest rates to the direct benefit of taxpayers.
Although it must be used responsibly, this favorable bond capacity is part of the engine that drives the type of progress we have seen in recent years without appreciable tax increases. It is achieved only through diligent financial management and sound fiscal planning. Even as we dream big, we must live within our means, and that is exactly what independent observers like Moody’s look for and say we have done.
So, for people like me in a fiduciary role, as well as for any other taxpayer in our community, it is very important to hear what Moody’s has to say about Scotch Plains, especially as the township has enjoyed a relatively flat tax rate over the past eight years under governing bodies led by both Democrats and Republicans. Since 2014, for example, the municipal portion of the tax rate in Scotch Plains has increased by an average of only 0.63%. During that same period, the municipal portion of the tax rate was held flat -- with a 0% municipal increase -- in 2015, 2018, 2020, and 2022. That is a tremendous feat, considering that the dollar had an average inflation rate of 2.84% per year between 2014 and today, producing a cumulative price increase of 25.11% in that time.
In its report on our town, Moody’s writes: “Scotch Plains Township has an exceptional credit position. Its Aaa rating is much higher than the median rating of Aa3 for US cities. The key credit factors include a very strong financial position, a very strong wealth and income profile and a solid tax base. It also reflects a negligible debt burden and a somewhat elevated pension liability.”
Moody’s adds: The township's financial position is robust and is aligned with the assigned rating of Aaa. The cash balance as a percent of operating revenues (55.9%) is above the US median, and grew modestly from 2015 to 2019… Scotch Plains Township has an exceptionally healthy economy and tax base, which are in line with its Aaa rating.”
Those are not the words of a politician seeking elected office. They are the words of a trusted, third-party authority regarding the financial health of a municipality.
Despite keeping taxes flat this year, Scotch Plains has used its budget for a number of improvements, such as: renovations to Greenside, Green Forest and Brookside parks; hiring a new police officer and providing our police officers with state-of-the art training and equipment like new fully outfitted patrol vehicles and body cameras; upgrading the municipal IT system; purchasing an ambulance and other life-saving equipment and education for our Fire Department; adding a DPW worker; improving leaf collection; and hosting a number of inclusive community events, according to the Town Manager’s budget briefing this spring, delivered at a public Township Council meeting.
I hope this public information helps residents gain a better understanding of the ongoing fiscal strength of our municipal operations. To review the municipal budget, as well as annual budgets back to 2012, click the tab for “Budgets & Financial Documents” at scotchplainsnj.gov. The Moody’s report is included there, as well.
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Thank you.
