Mayor Steven Fulop announced a new 2020 municipal budget on Aug. 10, which includes no tax increases despite the $70 million budget impact of the COVID-19 pandemic cost on local expenses and revenue losses since March.
“We have been focused on the hardships our residents are facing amid this pandemic, which is why we were dedicated to finding financial avenues on the city’s side to balance the biggest budget instability we’ve ever faced while avoiding further financial burden for taxpayers who are already struggling,” Fulop said. “Our budget team has been working since day one to finance the expansive city services and resources that are experiencing more demand than ever before, while simultaneously plugging a gaping budget hole in the wake of the pandemic that has crippled other municipalities across the nation.”
The Jersey City Council is expected to vote on the budget introduction during its Aug. 12 meeting at 6 p.m. held virtually on Microsoft Teams.
According to the city, this year’s budget includes approximately $25 million in immediate and long-term savings from voluntary employee buyouts, hiring freezes, restructuring personnel, elimination of overtime costs, reassessment of operational efficiencies, healthcare cost reevaluation, program inventory assessments, reducing and eliminating operating costs and contracts, internal audits, and debt restructuring.
The city will also leverage approximately $20 million in CARES Act funding to help offset additional expenses incurred.
This year’s budget commits to long-term financial recovery with comprehensive fiscal management plans to create better internal financial policies, controls, and safeguards as well as exploratory shared service agreements.
“We examined each budget item line-by-line, as the Mayor was clear he did not want the municipal taxes to go up and further devastate residents,” said John Metro, director of the Department of Finance. “From the hiring freeze to reassessing city operations, we have chipped away at one of the largest budget deficits the city has ever faced, and were able to produce a budget to continue the critical services that residents rely on and still find cost savings.”
Despite the current challenges faced by local governments, the mayor’s actions were recently cited by Moody’s credit rating as reason to earn a “stable” rating this year compared to most other cities seeing credit downgrades and negative reviews.
Moody’s reports, “The city government is taking strong action to address both the public health needs of the city and the budgetary implications thereof. The city also has extensive plans to address the substantial expected losses of revenue.”
“We had to make a lot of tough decisions and changes to our budget appropriations because of the massive COVID-related revenue losses that would not normally even be a consideration,” said Business Administrator Brian Platt. “A large number of small sacrifices and cuts across the organization have thankfully allowed us to continue providing vital services without a tax increase.”
The Jersey City Council had already introduced a roughly $612 million municipal budget in February, but in early April, Fulop shared details on the projected $70 million financial exposure amid the COVID-19 pandemic – $50 million in revenue loss coupled with $20 million in added expenses in response to the health crisis.
Two weeks later, the city began balancing and overhauling the budget and alleviating residents’ financial hardships.
“While I don’t have oversight/input of school taxes, county taxes, state taxes, or federal taxes – our team does have control of the city/municipal budget which is one aspect of your tax bill that I can directly impact,” Fulop said. “Our team felt that in these times when people are struggling with personal finances due to Covid-19 that we should do everything in our power to continue stabilizing the city finances as we have done over the last few years. We felt it crucial in these times to have no tax increase, and we will present a budget that speaks to this.”
Fulop said since taking office his administrations set a long-term goal of remodeling the city’s budget “after decades of mismanagement” by gradually eliminating tax abatements, having internal audits, eliminating redundant services, and autonomous agencies.
To view the council resolution on the amended budget go to https://cityofjerseycity.civicweb.net/document/32064/CY%202020%20Budget%20Amendment.pdf?handle=0A311D6744F34EB98D0AAF50B1C7F2A4
To join Wednesday’s meeting go to https://cityofjerseycity.civicweb.net/Portal/MeetingInformation.aspx?Org=Cal&Id=157