Bayonne introduces 2019 budget

City council to vote on final budget on July 17

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The Bayonne City Council will vote to adopt a final budget on July 17.
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Healthcare costs consistently make up the largest increase in cost to the district.
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The Bayonne City Council will vote to adopt a final budget on July 17.
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Healthcare costs consistently make up the largest increase in cost to the district.

The Bayonne City Council introduced a $141.3 million budget, representing a gradual increase from the $139.7 million budget in 2018, $136.4 million in 2017, and $135.4 million in 2016.

The council will hear public comments and is expected to adopt a final budget at its next council meeting on July 17.

Many expenses either did not increase from last year or rose slightly. Total salaries and wages dipped very slightly from $59.6 million in 2018 to $59.3 million in 2019.

Salaries and expenses for the office of the mayor were about $955,000, down from $1 million in 2018. The city clerk and the municipal council, at about $704,000, were down from $1 million; the department of administration, which includes the offices of the business administrator, finance, tax assessor, and tax collector amounted to $3.2 million, up from $3.03 million.

The office of the law department came in at $937, 000 up from $832,000. The department of public safety, the largest expense to the city, costs $47 million, slightly lower than last year. The department of public works costs $9.6 million, up $400,000 from last year. The city expects to raise $2.1 million for the library.

The city also expects to generate $1.2 million in municipal court fees and $1.1 million in parking fees. Compared to suburban municipalities, Bayonne relies much less on fines and fees for its operating budget.

The city pays $2.75 million for workers compensation, which is statutorily mandated to protect city employees in the event they are hurt in the line of duty. Employee health plan costs declined from $16.89 million in 2018 to $14.95 million in 2019 because the city chose a different health plan last year that requires city employees to pay higher premiums.

Bayonne residents face another property tax rate increase of 1.99 percent over last year, after the Bayonne Board of Education passed a proposed $146.1 million budget for the 2019-2020 school year that includes a tax levy of $69.6 million in March.

Schools are a major expense

A significant portion of the expense to taxpayers includes the school district’s tax levy. The Board of Education in March passed a budget that was $16 million more than last year’s, and included a 2.87 percent property tax increase and a $68.3 million property tax levy. The year prior required a 5 percent tax rate increase.

The school district, which is funded from 40 percent of Bayonne’s property tax bills and state aid, levies additional taxes when the cost of running the district increases.

Healthcare costs consistently make up the largest increase in cost to the district. Salaries and benefits take up more than 80 percent of the budget. In May of 2018, the school board ratified a four-year teachers’ contract that collectively grants teachers a 12.7 percent raise. Still, Bayonne teachers remain the lowest paid in the county.

The tax increase came even though the school district received $65.5 million in state aid, up $5.5 million from last year. However, the district remains $53 million short of the original funding formula, passed in 2008.

Tax rates remain on the rise

Since 2010, Bayonne’s tax rate has increased by 23.8 percent, 8 percent higher than the state average. Bayonne has a property tax rate of $8.45 per $100 of assessed value and an average annual tax bill of $10,425. The city levied from property owners a total $183.4 million in 2018, with 14.6 percent going to the county, 42.9 percent to fund the school district, and 42.9 percent to the city coffers to pay for local services, police and fire departments.

The city is in the early stages of a city-wide property tax revaluation intended to equalize the tax burden on property owners. City officials have not predicted when the results of that revaluation will be in, but typically taxes on newer construction, usually already taxed at 100 percent of its value, decreases, while taxes on older properties that have not been revalued during years when property values have climbed, tend to see their taxes increase.

The city is still reeling from decades of disinvestment, whereby people move themselves or their businesses, and thus their property tax payments, to a different town. The result was a 2013 structural deficit that ballooned to more than $30 million.

The city’s strategy to return to fiscal stability has been to attract developers to construct more properties that will one day pay property taxes. The city struck payments-in-lieu-of-taxes (PILOT) deals with dozens of developers, who will make negotiated payments to the city instead of property taxes for a defined amount of time, usually 15 to 30 years. In 2019, Bayonne is anticipating about $11.9 million in PILOT payments.

For updates on this and other stories check hudsonreporter.com and follow us on Twitter @hudson_reporter. Rory Pasquariello can be reached at roryp@hudsonreporter.com.