The town's cut in state aid may not affect the budget much, but there are concerns about declining revenue and its impact on the budget and taxes.

Gov. Jon Corzine proposed a cut in muncipal aid earlier this month, and Millburn-Short Hills was one community that received a larger cut.

Under the state budget, Millburn-Short Hills received a cut of 4 percent, or $126,000, in aid. It's the second year in a row for a cut. A year ago the town lost $226,000 in state aid.

"It's not going to affect us dramatically," said Tim Gordon, town administrator. "But you have to look at revenues as a whole."

The number of building permits filed in Millburn-Short Hills has dropped significantly, Gordon said. In January 2008, the town generated $35,000 in revenue from building permits. In January 2009, however, $10,000 in revenue was generated from building permits.

"Over the course of a year, that's close to a $200,000 difference," he said. "A build up of revenue losses over time could trigger something. You won't see it this year, but it's going to hurt down the road."

While town officials do not anticipate municipal job cuts this year, Gordon said the revenue losses could force towns to lay off people not only this year but also down the road. It's unclear what position Millburn-Short Hills will be in down the road, he said.

State officials determined how much each community would lose in aid based on taxes per capita and income per capita. If a community paid a lot of taxes and had a low income, the aid was not cut.

Gordon said Millburn-Short Hills fell into a category with 123 other communities that lost 4 percent in aid. Most communities lost 2.5 percent in aid.

Now that municipal aid numbers are in place, town officials will work through the budget. Gordon said there might be a public discussion on the budget in April.