Both Union City and West New York announced good news for their residents when passing the municipalities' preliminary tax rates for the last two quarters of the calendar year. Both towns have lowered the tax rates for those quarters.
In addition, many homeowners in these two municipalities and the other three towns that are served by the North Hudson Regional Fire and Rescue squad will see a tax decrease in the bills that are being mailed out this week, due to the Regional Efficiency Aid Program (REAP) tax credit.
The tax rates were projected for the new fiscal year, which began on July 1 and will end June 30, 2002.
Union City Mayor Brian Stack took office 10 months ago, he vowed to make Union City fiscally sound as well as lower the municipal tax rate for residents.
This year's preliminary Union City tax levy was set at $36,791,721.22. The tax levy is the total amount of money the city needs to raise from homeowners via taxes.
The tax rate, on the other hand, is the amount of money each resident pays per $1,000 worth of property he owns. Union City taxpayers will be paying $46.30 per $1,000 in property, an 81-cent decrease from last year's rate, Stack said. That means that the owner of a $150,000 home will pay $6,945 in taxes over the next year, or $121 less than last year.
"We are a long way from where we should be," said Stack. "If you had asked me 10 months ago if I was going to lower taxes this year, I would have said there is no way."
Stack credits his financial team, led by volunteer Bob McKechnie, who retired in 1998 as supervisor of accounts for the city, for the decrease.
When Stack first took office 10 months ago, McKechnie and his team found that some of the city's money was being held in non-interest bearing accounts. After transferring these monies to interest-bearing accounts, Stack said that he was able to generate about $300,000 in interest.
According to Union City Tax Assessor Doug Yandolino, the city has been able to add $30 million to the city's ratable base through added assessments, meaning renovations and upgrades to homes that increased the value of the property. With more people paying taxes on higher-assessed property, there are more taxpayers sharing the bill.
Stack also boasts a $1.5 million surplus of funds this year.
"We went from having a cash deficit of $1.4 million to a surplus of $1.5 million," said Stack, adding that he was going to use some of that money to start paying off a $15 million structural deficit. A structural deficit is an amount of money in the budget that a city expects to spend each year without a steady recurring revenue stream to cover it. Often, deals with other municipal agencies, or sales of assets, are used to plug the gap each year.
"Hopefully if we continue to build the surplus, we can drop the tax rate even further," said Stack.
WNY Remaining steady
West New York Mayor Albio Sires and his administration have been able to stabilize their tax rate for the seventh year in a row.
West New York has set their preliminary tax levy at $18,717,800.31. This will make the town's overall tax rate $44.37 per $1,000 in property, two cents lower than last year. So the owner of a $150,000 home will pay $6,655.50 in taxes this year, $3 less than last year.
"We are proud to say that this is the seventh year that this administration has been able to give the homeowners in West New York a stable tax rate," said Sires adding that the tax rate has gone down about four percent since the five percent decrease in taxes received in 1995.
Sires said that while the tax rate in the town is slightly down, the town's ratables are going up. According to Sires, the town's ratables are up about $3.6 million.
REAPing the benefits of regionalization
For the second straight year, homeowners in the five municipalities that are serviced by the North Hudson Regional Fire and Rescue squad will see a substantial drop in their August and November municipal tax bills - all courtesy of being part of the NHRFR regionalization program.
Thanks to former New Jersey Gov. Christie Whitman's Regional Efficiency Development Incentive (REDI) program, which was first put into place in June of 2000 and offers state grants and loans to help in shared service programs, the five North Hudson municipalities, namely Union City, North Bergen, West New York, Weehawken and Guttenberg, will receive more than $6 million in state funds.
In turn, those funds will be returned to the homeowners of the five municipalities, in the form of a tax credit.
The funding comes from the state Regional Efficiency Aid Program (REAP), which rewards towns that use shared service programs. Each town in the REAP program receives funding based on need and population.
The state provided $25 million in REAP grants statewide - and more than $6 million (precisely $6,654,600) of the entire funding pool went to the towns that participate in the NHRFR.
According to the NHRFR's chief financial officer, Chris Pianese, the Regional received even more funding this year, up from $6.2 million received last year, due to an application for funding for vehicle maintenance and repairs.
"Because all of the Regional's vehicles were repaired at one location in North Bergen, we were entitled to more funds," said Pianese, who is also the chief financial officer for the township of North Bergen. "The NHRFR clearly got the largest chunk of the available funds and it is a substantial amount, which leads to a substantial tax credit."
Because of its size and population, Union City received the largest total, more than $2.1 million. North Bergen received $1.9 million, with West New York receiving $1.6 million, Weehawken getting $574,000 and Guttenberg receiving $392,000.
Although some of the towns have yet to send out their tax bills for the August quarter, the savings for North Bergen homeowners will average out to $260 annually for every average home assessed at $140,000. Last year, North Bergen homeowners received a credit of $230 annually thanks to the REAP program.
In Union City, Tax Assessor Doug Yandolino said that homeowners will receive $394 annually for every average home assessed at $100,000, which will probably only show up in two quarter-year tax bills as $197 per quarter.
Yandolino said that landlords who live in their building and own a dwelling of up to four families or an apartment building that is strictly residential qualify for REAP credit. The landlord also had to have owned the building since October of the year before to qualify for the credit.
West New York Business Administrator Richard Turner said that West New York homeowners will receive $393 annually for every $100,000 assessed on the average home from REAP tax credits. In West New York, this means a 9 percent decrease in property taxes just based on the REAP credits.
Turner also mentioned that this year's REAP credit in West New York is higher than last year's, meaning that homeowners will see their tax bills drop $35 to $40 compared to last year.
"It's an enormous tax benefit," Turner said. "This is one of the rare innovations created by former Gov. Whitman that provides real tax savings to the homeowner. It's an incentive program that encourages towns to stop duplicating services. It represents 15 percent of our municipal budget and it represents a 5 percent tax decrease for our homeowners. It shows that the regional works. It provides better service, it's more cost efficient and now enables us to provide a tax break." - Jim Hague and Christine Nardone