On May 7, 26 employees for the city of Hoboken, 4 percent of the city’s workforce, will lose their jobs as a result of a multi-million-dollar budget gap, which continues to grow with added expenses and revenue shortfalls due to the COVID-19 pandemic.
In February, the city sent general layoff notices to 79 city employees because the city was facing an up to $14 million budget gap due to increases in employee medical benefits, state-issued pension bill increases, anticipated increases in salary for the city’s six municipal labor unions, as well as revenue shortfalls, and depleted surplus funds.
“The administration has been working tirelessly to implement cost savings to offset a number of fixed costs for the upcoming budget,” said city spokesperson Vijay Chaudhurri. “As a result, the amount of positions submitted for layoffs was substantially reduced,”
Mayor Ravi Bhalla announced the layoffs in a Nixle alert to constituents on April 17, citing the impact of the pandemic as an added difficulty making layoffs “unavoidable.”
“The City has taken on additional new costs to protect the health and safety of residents, while also realizing substantial losses in revenue due to the crisis,” Bhalla said. “The negative budgetary issues from COVID-19 and an additional anticipated loss of revenue in the weeks and months to come, compounds an already difficult budget for this year…While my administration has been working tirelessly to address previous budgetary challenges and has made progress to this effect, the pandemic and our fiscal standing makes it extremely difficult to withstand such a major impact without layoffs in City Hall.”
“I hold a responsibility to the taxpayers of Hoboken to do everything possible to mitigate a large tax increase due to these factors and must act on that obligation,” he added. “I recognize the impact this decision will have on some of our employees and their families, and we will do everything possible to assist them with their next steps. During these challenging times, unfortunately, difficult decisions have to be made to protect the long term fiscal health of our City.”
According to Chaudhuri, the office of civil service will determine which positions will be part of the layoffs, but the city will ensure that all departments and services continue to be provided as efficiently as possible to Hoboken residents.
The city has yet to introduce a budget to the city council which was originally due at the end of April, but due to the pandemic, an extension has been granted.
“The state has changed its fiscal calendar to end July 30, and we await guidance from the state regarding additional municipal budget deadlines,” said Chaudhurri, noting that a budget won’t be introduced until later this year.
When asked how much the city anticipates it will lose in revenues and spend due to the pandemic as well as if the city would seek federal reimbursement, Chaudhuri said it was difficult to predict what type of state and federal aid would be available, what costs could be reimbursed, and how long Hoboken and the state will remain in self-isolation.
“Once there is more clarity, updated budget numbers will be able to be calculated,” he said.
How to navigate through this?
In an April 15 email to constituents, Councilwoman Tiffanie Fisher, who sits on the council’s finance subcommittee, suggested that COVID-19 may increase the budget gap anywhere from $5 million to $8 million.
“I actually do not know how we are going to navigate through this, but the administration and our council subcommittee have been working to do so,” said Fisher, adding “at all levels of government, revenues have reduced significantly.”
“We need the state to provide relief aid to fill what is probably an additional $5-8 million shortfall in Hoboken,” she said, noting that the state is also facing its own budget shortfall of approximately $5 billion.
Councilman Michael DeFsuco criticized the layoffs in a statement, particularly as the council had yet to receive any kind of budget and was informed of the impending pink slips through the Nixle alert.
“Now isn’t the time to be putting people out of work, we need to properly analyze our city’s spending and make cuts that will not impact essential, day to day, city service and emergency response,” DeFusco said. “Frankly, it’s unacceptable for the Mayor to mislead the public about our municipal finances and use a global health crisis as an excuse for a budget deficit we learned of two months prior to the local outbreak.”
He said he had reached out to the council president to request a special meeting at which time he would like the council presented with financial information such as a municipal budget outline.
Council members Phil Cohen and Emily Jabbour criticized DeFusco’s statement as a political attack.
“It’s unfortunate that during the COVID-19 national pandemic, Councilman DeFusco continues to play politics,” said Cohen, noting that he would have had the chance to gather budget information during the daily COVID-19 calls the city has held with local officials.
“It’s sad that Councilman DeFusco, again, is pushing his political ambitions to the fore, while the City addresses an existential public health crisis,” he said.
Jabbour said the city and the council are “doing everything we can to prepare a responsible budget” while managing the crisis and daily changing conditions and was able to save 53 jobs by limiting the layoffs from 79 to 26.
“Councilman DeFusco is playing politics, again, for the sake of his planned mayoral campaign,” said Jabbour. “This latest attack, with respect to the budget, is more of the same – and it’s not productive to play politics when this Administration is on the front lines, making critical decisions for the city. I know that the Administration is doing the best it can to navigate this crisis and does not take these decisions lightly.”
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