Jersey City is undergoing the largest development increase in its history, and as a result, taxpayers will be forced to bear a larger portion of county taxes this year, a 10 percent increase.
The Hudson County Board of Freeholders voted on June 8 to approve their $540 million 2017 budget.
Jersey City will pay the largest increase this year. West New York, Weehawken, and Hoboken could pay about a 6 percent hike, East Newark a 3 percent jump, and North Bergen a 1 percent increase.
The county budget is made up of two parts: revenues (grants, state, and federal aid, and a tax levy on property), and expenditures (costs for salaries, programs, and items). Property owners pay quarterly taxes that go to the county, Jersey City schools, and the city.
“This budget was $3 million less than last year.” – Bill O’Dea
The county tax rate, however, is configured differently than municipal and school tax rates. The county divides its total tax levy among the 12 municipalities based on the total value of taxable property – ratables – in each town. By this formula, if a municipality’s total ratables rise, it will pay for a larger percentage of the county budget, a cost passed on to individual taxpayers. So a town experiencing a development boom like Jersey City that increases ratables over the previous year generally has to pay more of the overall budget. (Theoretically, though, there will be more property owners contributing to the burden.)
County wide, the tax levy will rise this year by 4.2 percent.
Although the budget is roughly $3 million less than in 2016, efforts to cut it ran into some serious roadblocks since the cuts were offset when county lost a number of state grants.
The county Department of Health and Human Services that oversees redistribution of state and federal aid to the most vulnerable in the county has lost about $16 million in state and federal funding from last year.
Insurance costs also increased about $5 million over last year.
“This budget was $3 million less than last year.” said Freeholder Bill O’Dea. “We managed to cut $1 million over all, but the state also imposed additional expenses in close to equal amount. The equalized formula would have meant even if we cut $10 million which meant no increase in the amount to raise in taxes, Jersey City would still pay more than five percent more than last year. The formula has to be changed to affect unrealistic increases in sales over a short period of time.”
The final vote at the freeholder meeting was 6 to 1 with O’Dea voting against it. Freeholders Jerry Balmir and Anthony Romano were absent.
Reevaluation will impact taxes for some in 2018
Although Jersey City hasn’t had a municipal tax increase in three years, this is the second year Jersey City was hit with a large increase in county taxes.
This also comes during a time when the city is undergoing a reevaluation of property, which means that older under-assessed properties will likely get a significant spike in taxes in 2018.
Complying with an order from the state, the city must have the reevaluation compete by Nov. 1 of this year. Local officials say the figures will be collected by early October and a final draft sent to the state. At the same time, property owners will learn their new assessed value. While this does not mean an automatic increase in municipal taxes over all, those with drastically under assessed properties can expect an increase.
The reevaluation will also have an impact on the 2018 county taxes, since this will result in a massive increase of city-wide assessed property value. The reevaluation will cause a large increase in the city’s overall property value and so will result in local taxpayers being required to pay a larger share of the county taxes in 2018 as well.
Arts tax may be passed this year as well
Also on the agenda for Jersey City is a proposed arts tax, which is expected to come before the city council in the fall. Although the details have yet to be worked out, this tax could involve the sharing of hotel taxes, which the city currently uses as part of its general revenue, a possible restaurant surcharge, and some other possible taxes.
Although the city council appears to support the proposal, some local artists not associated with any of the larger groups fear that the funding will be skewed in favor of more established organizations and not individual artists who need the money the most.
While city officials said a modified Arts Council will oversee the distribution of funds raised by these taxes, some opponents may seek to have the matter put on the November ballot at a referendum.
Al Sullivan may be reached at asullivan@hudsonreporter.com
