Updated: May 2
By Barbara A. Preston | Posted May 1, 2025 (updated on May 2, 2025)
Chief Financial Officer Michael Pitts introduced the 2025 budget and gave a presentation at the Montgomery Township Committee meeting on April 3. The 2025 budget is scheduled for adoption at the May 1 Township Committee Meeting. The municipal component of the property tax rate is increasing to $0.48. That is a 2.89% increase over last year. The owner of an average home assessed at $507,400 will pay $69.93 more in taxes in 2025, for a total annual municipal tax of $2,434.18. This figure does not include the municipality’s fire district tax or the township’s open space tax.
Township Committee approved the budget on Thursday, May 1.
This year, the municipal portion of a Montgomery resident’s property tax is about 16% of the pie. The school tax is about 68% and the county accounts for the remaining 16%.
It seems odd, but the average home assessment for property tax purposes in Montgomery is only $507,400. Meanwhile, the median listing home price in Montgomery Township was $880,000 as of March 2025. And the median home sold price was $955,000, according to Realtor.com. The reason for the difference in the tax assessment of a Montgomery home and the market price of same home has to do with how often a town conducts property valuation. The last Montgomery Township-wide revaluation was conducted in 1999. The township will undergo a re-evaluation with a completion date of 2028.
CFO Pitts, in his budget presentation to township committee in April, pointed out that it’s important to keep in mind that the municipal budget only makes up 14% of a Montgomery resident’s property taxes—well, 16.7 % if the 1.2% open space tax and the 1.5% fire district tax is included. “We always mention that because we get complaints from residents when their property taxes increase,” he has said. “We try to do our best to minimize tax increases, but we are just a small piece of the pie, with almost 68% going to the school district.”
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The Montgomery municipal budget (excluding grants) increased by about $755,098. The total 2025 budget will be about $32.6 million. The amount to be raised by taxes is about $19.4 million. It looks like a lot of money, but Pitts pointed out that Montgomery received almost $1 million in grants for this budget. The largest grants include $431,120 for a stormwater basin and a $356,411 DOT grant from Township Line Road improvements. The main drivers of the 2025 budget include: Paying the annual debt on bonds; Police contractual salaries and pension costs; and Health benefit costs for municipal employees. “Police are expensive,” Pitts has said. “In every municipality, the police are a big chunk of the budget.”
▪ Salaries $11.2 million
▪ Annual debt $5.86 million
▪ Pensions $2.4 million
▪ Health benefits $2 million
▪ Reserve for Uncollected taxes $1.5 million
▪ Vehicle Maintenance $825,000
▪ Liability Insurance $435,500
The state of New Jersey says that municipalities cannot increase the amount to be raised by taxes by more that 2% annually. Pitts explained that Montgomery’s budget is allowed to increase by 2.89% because there are certain exclusions to the levy cap. “When it’s related to increases in debt, increases in capital improvements, and some other exclusions, then you are allowed to raise your taxes by more than 2%,” Pitts said. The state of NJ also has a 2.5% Appropriations Cap on salaries and operations expenses. However, municipal governments may pass an ordinance to override the Appropriation Cap, and may increase the budget up to 3.5%, which Township Committee did in March.
