The Bhalla Administration introduced a municipal budget to the Hoboken public via a Nixle alert on July 6.
According to the alert, the budget includes a $5.5 million increase in municipal taxes for an overall tax increase of approximately 1.4 percent.
This comes as the city has been facing a multi-million-dollar budget gap due to an increase in pension payments, health care, union contract payments, garbage hauling contracts, and a loss in revenues from court fees and the Hoboken Parking Utility.
This budget gap which was further exacerbated by the pandemic.
“Like the rest of the country, Hoboken’s economy and finances have not been immune from the coronavirus pandemic,” said Mayor Ravi Bhalla in the alert. “In the face of unprecedented budget challenges compounded by COVID-19 and continuing uncertainty about the virus and the economy, we are putting forward a responsible, balanced budget that provides the services our community expects and continues to invest in our future.
“Through a combination of difficult cuts and new revenue sources, we have chipped away at a nearly $20 million budget shortfall and are introducing a budget that would result in an overall property tax increase of just over 1 percent. I look forward to working collaboratively with the City Council in the weeks ahead as they consider and ultimately adopt a budget.”
$19.8 million budget gap.
Entering the fiscal year, increased costs and revenue losses created an estimated $7.4 million budget shortfall, compounded by a $6.4 million reduction in regenerating surplus and $5.9 million in added costs and lost revenue due to COVID-19 for a total budget impact of approximately $19.8 million.
Through a variety of cost-cutting measures including layoffs as well as new revenues, the city said it has been able to close the budget gap to approximately $10.9 million.
According to the city, the introduced budget proposes using $3.3 million of the city’s non-regenerating budget surplus.
The remaining $5.5 million budget gap would be closed by a 9.8 percent increase in the municipal tax.
Municipal taxes are only a portion of a total tax bill representing 33 percent of the total tax bill (County taxes are 36 percent, Schools are 26 percent, the Library tax is 3 percent, and the Open Space tax is 2 percent.)
Because of this and the fact that this year Hoboken’s share of county taxes is decreasing by 6 percent, the overall tax impact on property owners from the introduced budget would be an increase of 1.4 percent, which for the average assessed property in Hoboken of $522,000 corresponds to an annual increase of $115, or $9.50 per month.
The budget will be presented to the council at the July 8 virtual council meeting at 7 p.m. which can be viewed on Facebook .
For more information on how to join the zoom council meeting click here.
Some members of the council took aim at the administration’s proposed budget.
Councilman Mike DeFusco, a frequent critic of the administration, said that the council has spent the last six months asking the mayor to present the council with a budget and be transparent with the council and public regarding the city’s finances.
“The administration is now attempting to hide behind the fact the mayor wants to raise municipal taxes by nearly 10 percent, on top of borrowing $5 million at the expense of taxpayers, while our county tax burden decreases,” said DeFusco, adding that the city’s budget gap was a result of “gross misspending, awarding politically connected contracts and giving out patronage jobs.”
“It is nothing shy of irresponsible for Mayor Bhalla to continue using a global health crisis as an excuse for years of poor financial planning, even after recovering $1.4 million in federal aid,” said DeFusco, calling the budget “gimmicky” because it gives the council only 48 hours to review and introduce, adding that “taxpayers deserve better than this.”
Councilwoman Tiffanie Fisher who sits on the council’s finance subcommittee also critiqued the administration and its proposed budget.
“Financial acumen, transparency, and leadership is a weakness of this administration which is why the City Council has been focused from the start on seeing the budget,” said Fisher who noted the council received the budget for the first time after the announcement of the budget had already been sent to the press. “We are hoping that in a year where many are suffering financially that the Mayor’s budget reflects the best possible outcome for Hoboken residents. To date, what we have seen has shown few cost-cutting measures, an overstatement of the impact of COVID, reliance on surplus and one-time revenue sources and kicking 2020 costs into 2021. I look forward to reviewing the budget in detail and working with my colleagues and the administration to deliver a fiscally responsible FY2020 Budget. By the way, the mayor should be buying the County flowers given its significant rate reduction which allows a 9.8 percent municipal rate increase to look much lower overall.”
Last month acting Business Administrator Jason Freeman told the council that the city has been finding ways to narrow the gap and cut costs including roughly $3 million in savings related to health care appropriations, as well as department budget cuts, reductions in contract negotiations, layoffs, and cuts to discretionary spending in the mayor’s office, business administrators office, engineering department and legal department.
Still moving forward
According to the city, while Hoboken still overcomes the challenges of COVID-19, the city continues to move forward with major infrastructure and quality-of-life projects:
These include repaving more than 40 blocks of streets and restripping crosswalks and bike facilities citywide; eliminating the line at the Parking Utility through online permits and by launching an appointments-based program; working with NJ TRANSIT to reduce crowding on the 126 Clinton Street and Willow Avenue bus routes through articulated buses and additional bus stops.
Also, ongoing construction of the new five-acre Northwest Resiliency Park among other park improvements; supporting businesses by creating 12 streateries, 21 parklets, and more than 150 expanded sidewalk cafes; replacing water mains; and upgrading the South Waterfront Walkway with new pavers, 41 new trees, 200 native plants, and upgraded LED lighting.