Between the lines

No big surprise: taxes are going up

If you feel your wallet getting a little lighter this spring, a new storm water tax proposed by Gov. Phil Murphy may be one of the reasons.

Mocked as “a rain tax” by its opponents, the new law would allow towns to create storm water utilities. These would help prevent flooding and manage resources of runoff pollution.

But if a town decided to create a storm water utility, property owners will pay for it based on the amount of potential runoff space they have – such as roofs or parking lots.  This could have huge implications for large businesses, warehouses, supermarkets or parking areas for buses such as those in North Bergen or Hoboken.

Meanwhile, the new payroll tax in Jersey City won’t be coming out of local taxpayers’ pockets, but will be imposed on businesses and corporations. This was designed to help offset a massive loss of state aid to the local school district.

“This is killing the golden goose,” said one consultant to several local businesses. “You spend a lot of time and money trying to encourage these companies into coming to Jersey City, and then you hit them with a tax.”

If an employee lives in Jersey City, the company doesn’t have to pay. Municipal and school employees also do not count.

State aid was cut to Jersey City largely because the city’s real estate tax abatement policies allowed the city to collect huge payoffs from new residential property without giving any of that money to the schools.

The state funded Jersey City schools because the city was seen as an impoverished district. But resentment started to mount in school districts elsewhere in the state that were helping to subsidize Jersey City schools when Jersey City municipal leaders were not.

Business owners attempted to challenge the law in court, but a superior court ruling said the law was constitutional. While Mayor Steven Fulop and others are celebrating this as a great victory for the school district, it really is allowing municipal government to have its cake and eat it, too, getting someone else to foot the bill for local schools.

Although Fulop in his State of the City address tried to lay blame on other administrations for the abatement issue, his administration has been equally guilty of taking advantage of the additional funding to the city that abatements provided.

As one of his former council people claimed, “as long as the state is paying for most of the school budget, this is good for Jersey City.”

Only after dark clouds started to rise over Trenton, and legislators there began to make noise about the issue did the Fulop administration back off. Current and former school officials protested at council meetings pleading for the city to make changes to its abatement policies before it was too late.

Now it is too late, even though Fulop suspended abatements in late 2017.

As Councilman James Solomon pointed out, it isn’t a perfect answer, but it is absolutely necessary.

If the $609 million school budget is any indication, the payroll tax isn’t nearly enough. The district may have to lay off as many as 600 employees and still raise school taxes by $10 million.

Can DeFusco win?

In a scene that is as tricky as a minefield, Hoboken’s First Ward remains a race that is a complete mystery.

If you listen to the rhetoric, Councilman Michael DeFusco may well be the most unpopular council member in a generation and yet, few names have yet to emerge to challenge him in November.

This will likely change shortly. Yet for all the talk that has been going around for months about how unpopular a guy he’s become, the lack of a leading candidate could well put him in a good position to retain his seat.

When DeFusco beat incumbent Teri Castellano four years ago, many factors came into play. DeFusco was seen then as a member of Mayor Dawn Zimmer’s team.

Assemblywoman Annette Chapparro worked hard on his behalf to get the vote out for him in critical areas of the first ward. DeFusco also got support from Councilman Ruben Ramos, splitting the old Hoboken vote.

Since then, Zimmer has been replaced by Ravi Bhalla as mayor after Bhalla beat DeFusco and others.

Some of the key insiders who helped DeFusco beat Castellano have since abandoned him. There is even rumor of friction between DeFusco and Ramos. But because Ramos, who has strong support from power brokers in North Bergen, is seen as an opponent of Bhalla as well, he will likely continue to support DeFusco.

DeFusco may still be able to retain his seat, partly because he may not face a significant challenge, and partly because he is extremely popular with millennials and local unions.

“He has a really good organization,” said one source. “And he’s got a lot of money.”

While Castellano was rumored to be running to unseat him, she seems to have backed off or at least is reconsidering.

There seems to be a move to draft a retired principal to run against him, but the person the opposition has in mind may not be able to wrench millennial votes away from DeFusco.

“While some people might have voted against DeFusco for mayor, they seem to love him as a councilman,” this source said.

Al Sullivan can be reached at asullivan@hudsonreporter.com