Healthcare Costs Drive Tax Increases, Delay Budget

Despite cutting costs for five consecutive years, said Collingswood Mayor James Maley, taxes are going up in the borough for 2013.

There are indicators that things are on the upswing, however, including an increase in the borough ratable base, declining debt and a housing market that has seen sale prices up 6 percent, according to Maley's latest blog on the borough website.

In it, the mayor offers some insight into the financial challenges the borough has faced in recent years, including declining revenues for things like construction and permit fees and ambulance billings.

"Since 2009, borough spending has been reduced $2.2 million," Maley wrote, noting that even with fewer dollars going out the door this year, the 2013 budget covers the hires of four more firemen and 2 more police officers.

Yet as in much of the American economy, a big driver of costs for Collingswood continues to be healthcare.

AmeriHealth, the current provider of health insurance benefits for borough employees, quoted a 20 percent annual premium increase for 2013. That led to a switch to the New Jersey state health benefits plan, a move that Collingswood had considered not too long ago, Maley told Patch.

"Back about five years ago, we were really looking at going with state health," he said, but "AmeriHealth cut their number back to get competitive with the state plan, and there were rumors there was going to be a big jump with state health [premiums], so we didn't do it back then.

"Then, the next year, the state health benefits plan had a big jump, so it was the right thing then," he said.

But under the Chris Christie administration, the health plan available to state employees has been "completely revamped," Maley said, "and they have a ton more towns in it than they did back then."

The state health plan has had far fewer fluctuations in premium costs as a result, Maley said. The changeover should save the borough a considerable sum.

"We won't save much this year because it's not in effect until September or October," he said, "but the savings next year could be $400,000 to $600,000.

"I think it will save the average fireman $2,000 a year on their net costs," Maley said.

The only stumbling block is largely procedural: a change in benefits means that the borough must get a sign-off from union employees. Maley said the borough has "a verbal okay from all the collective bargaining units, and has "just turned it over to our attorneys."

A formal budget presentation won't be ready in time for the borough commissioners meeting on Monday, Maley said, so he expect the borough will schedule an extraordinary meeting to introduce it before June.

Collingswood Superintendent Scott Oswald announced in March that school taxes will be down $20 per household, on average, this year, which will offset somewhat the cumulative effect of the $50 average household municipal tax increase.