Over the next few weeks, the Hoboken City Council will host a series of budget workshops in which city department heads will go over their budgets. These public sessions come after the council unanimously voted to introduce a $117.8 million municipal budget on July 8.
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 gap 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 which it will further close with an additional $3.3 million in non-regenerating surplus.
The remaining $5.5 million budget gap would be closed by a 9.8 percent increase in the municipal tax levy.
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.
This means that for the average assessed property in Hoboken of $522,000, the property owner would see an overall tax increase of $9.50 a month or an increase of $115 annually.
According to a budget presentation by acting Business Administrator Jason Freeman and the city’s Director of Finance Linda Lindolfi, the city’s miscellaneous revenues fell by 26.6 percent this year, the city’s anticipated surplus fell by 26.4 percent, and the Hoboken Parking Utility’s surplus fell by 69.9 percent.
The city anticipates additional decreases in revenues due to COVID-19 as well as additional COVID-related spending.
Also an unknown this year is state aid and how much the city will be able to receive because the state is also facing budgetary deficits this year due in part to the virus.
“I imagine there will be some issues with state aid,” said Landolfi, who noted last year the city received roughly $11 million in state aid.
Another unknown is tax collection and possible pressure on August and November tax collections due to COVID-19, said Landolfi, who said that a 1 percent drop in tax collections equals roughly $2 million.
The presentation, given by Freeman and Lindolfi before the council on July 8, also shows a reduction in salaries and wages by about 1.7 percent, a slight reduction in “other expenses” by 1 percent, and a reduction in capital improvement dollars this year by 22.4 percent.
The majority of the city budget is allotted to personnel costs, making up 74 percent of the operating budget, according to the presentation.
The presentation also notes that the Department of Public Safety’s salaries and wages, representing the salaries and wages for the police and fire departments, makes up 75 percent of the appropriations earmarked for salaries and wages, followed by the Department of Environmental Services and the administration each with 7 percent.
This year, 32.1 percent of the city’s operating expense is made up of the city’s group health plan, followed by the city’s pension payments, which make up 16.7 percent of operating expenses as well as debt service, which makes up 13.4 percent.
Budget workshops begin July 20 with the Office of the City Clerk at 6 p.m., Administration and Finance Departments at 7 p.m., followed by Corporation Counsel’s Office at 8 p.m.
On Tuesday, July 21, the Department of Community Development will present its budget at 6 p.m. followed by the Health and Human Service Department at 7 p.m. and the Department of Environmental Service at 8 p.m.
The last budget workshop is scheduled for Monday, Aug. 3 with the Police Department at 6 p.m. Fire Department at 7 p.m. and the Department of Transportation and Parking at 8 p.m.
All of the workshops will take place virtually on Zoom for the public.
Through the budgeting process, the council will be able to make amendments to the preliminary budget introduced by the administration on July 8, although a final vote on the budget as introduced is currently scheduled for a public hearing during the Aug. 19 council meeting.