GLOUCESTER TOWNSHIP, NJ — Gloucester Township has a safety net in the event the new coronavirus pandemic continues and the township finds itself facing a financial shortfall.
Gloucester Township Council unanimously passed a resolution Monday night that would allow the township to borrow up to $53 million due to the uncertainty surrounding tax collection and miscellaneous revenue streams surrounding the coronavirus.
The resolution allows the township to issue tax anticipation notes when needed, in an amount not to exceed $53 million. During Monday night’s council meeting, officials said they don’t expect to borrow anywhere near that amount.
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If the need to borrow any money arises, the resolution authorizes the township to borrow needed money. The Chief Financial Officer (CFO) will then prepare a report detailing what money was borrowed, and that report will be presented to council during a public meeting, according to officials.
Under state law, the township is permitted to borrow 30 percent of the tax levy plus 30 percent of the amount of miscellaneous revenues received in cash in 2019, which comes out to $53,120,035.92, according to a note from the CFO included in the agenda packet for Monday night’s meeting.
The CFO prepared a cash flow forecast with respect to the township’s budget requirements, showing that the township anticipates a cash flow deficit, pending the receipt of taxes and other revenues.
Resident Ray Polidoro suggested money should be borrowed quarterly, rather than set aside a number for a full year in anticipation that no taxes will be collected.
Business Administrator Tom Cardis said he couldn’t project what the quarterly payments would be because different things are paid at different times, and that borrowing quarterly would send a bad signal to the tax rating agencies.
“We don’t know how long this will last,” Cardis said. “We calculated the maximum allowable amount that can be borrowed, but we don’t anticipate getting anywhere near that number.”
In response to the coronavirus pandemic, Gov. Phil Murphy called for all restaurants and bars to close. While some remain open for take-out and delivery, much of the workforce has been temporarily laid off.
The same holds true for retail stores and other non-essential businesses that have been ordered to shut down by the state. As of last week, nearly 576,904 new jobless claims have been filed since March 15, according to the New Jersey Department of Labor and Workforce Development.
Polidoro asked about the possibility of tax deferments, and officials said that was up to state statute. Cardis said the township would discuss “anything that the state passes down.”
The state has taken measures to prevent evictions and foreclosures, but the question of property taxes, which are due May 1, remains unsettled as of Wednesday morning.
Gloucester Township has not proposed its budget for this year, so it was unclear if there would be a tax increase. Last year, Gloucester Township passed a $64.2 million budget with no tax increase, but there was a nearly 8 percent tax rate increase the previous year.
Cardis pointed out that the annual tax sale is in December, and includes all delinquent taxes, as well as the payments for CCMUA and GTMUA.
The resolution was approved with a 7-0 vote. The meeting was closed to the public, but it was livestreamed via YouTube. Public participation was possible through the YouTube chat option and by calling in on the phone.
Read more: NJ Coronavirus Updates: Here’s What You Need To Know
This article originally appeared on the Gloucester Township Patch