Borough officials are wrestling with a municipal budget that could carry as much as a $364 tax increase on a home assessed at $100,000.

The Borough Council voted unanimously to introduce the 2008 municipal budget at itsMarch 10 meeting, when Borough Business Administrator Andrew Salerno gave a presentation on the proposal. Salerno said the budget should be looked at not only as an annual document, but as a plan for the future.He said it is unusual for a governing body to allow its business administrator to account for future years, but that is the most efficient way to run a municipality. Officials ask state for waiver to increase levy, avoid cutting services

"It has to be multiyear to make any sense," Salerno said. Officials ask state for waiver to increase levy, avoid cutting services

The borough's three major budgetary components- the water utility, the electric utility and the current fund- have a total budget of roughly $30 million. Officials ask state for waiver to increase levy, avoid cutting services

"We have a $30million operation staffed by 100 people," Salerno said.

Salerno said that revenues did notmeet anticipated levels this year, due in part to approximately $689,000 that previously came from surplus generation in the electric utility

"That is not there, plus the loss of our water operating surplus," Salerno said.

In addition, state aid has been reduced by $156,755 from what the borough received last year for municipal tax relief, Salerno said. This occurred despite the fact that the state proposed substantial cuts for towns with total populations that are smaller than 10,000. South River has a population of over 15,000 people, he said.

Salerno said the borough is doing well with interlocal agreements, which is a priority that the governor's budget stresses to municipalities.

"We are way beyond the curve when it comes to this," Salerno said.

In addition to introducing the budget, the council unanimously approved a resolution to apply for a tax levy waiver from the state. Council President John Krenzel said the waiver is necessary because the borough needs to raise the levy millions of dollars above the cap. Since revenues are down, the tax levy will have to be increased further, above the 4 percent state cap on levy increases.

"As we saw in the presentation, our revenues are down," Krenzel said.

Mayor Raymond Eppinger said the town faces a significant challenge with this budget. If the state does not grant the borough the tax levy waiver, it could have serious consequences on services in town.

"If we don't get this waiver, we could close the library, the office on aging and recreation and still not have enough money," Eppinger said. "Lay off two police officers and you are getting close."

Eppinger, a Republican in his first year as mayor, said that prior Democratic administrations spent the borough "into oblivion." He said he saw this coming in January 2007, but he did not know it was going to be this bad.

As proposed, the 2008 budget does not include any new employees or programs, Eppinger said, and projects such as the renovation of the library cannot be undertaken at this point. He added that three new police cars that the chief of police requested are also not included in the budget.

"That is not even in the budget," Eppinger said. "That is the kind of thing we are dealing with."

Councilman Anthony Razzano, a Democrat, also stressed the importance of getting the property tax levy waiver.

"This waiver we are applying for is absolutely necessary," Razzano said. "Say a prayer, because the cuts [Eppinger] mentioned are not enough."

Salerno said the borough cannot afford to lose a single employee.

"We have a skeleton crew right now," Salerno said. "There really is no other place to cut."