The Hoboken City Council approved budget amendments, only to decisively vote down the $146,921,014.87 spending plan in an unusual turn of events even by Mile Square City standards.
By John Heinis/Hudson County View
“The amendment that the city council voted on and approved last week had a number of changes, a group of like minor changes, some cuts in different areas, some movement where we had to have increases because of actual costs incurred this year, but on a net basis, it was about $800,000 in reduction in the tax levy,” explained 2nd Ward Councilwoman Tiffanie Fisher.
“And a big driver to that reduction are two things: I think we secured a $250,000 grant to offset some salary and wage costs in our health division and the other was taking $500,000 out of our water utility reserves that we’ve been accumulating money in.”
At a special virtual meeting on July 1st, the Hoboken council approved amendments for a 147,468,841.87 million budget with a 4.6 percent tax increase.
Yesterday, Fisher and 4th Ward Councilman Ruben Ramos sponsored a resolution amending the budget again, bringing the overall spending plan down about half a million dollars and the tax hike down to approximately 2.9 percent.
This all came after the governing body voted down the preliminary $144,253,164.85 budget with a 5.9 percent tax increase in April.
“We don’t really want to cut services. There really isn’t any cutting of services in the original budget that was put forth by the mayor, nor in the amendment last week, nor in this one,” Fisher continued.
“In this amendment, we looked at sustainable changes that came to about a million dollars. It was taking another $500,000 out of our parking utility reserves, we have a fund there that has accumulated about $4 million. That money is rainy day money for future needs and we just felt using $500,000 this year would benefit bringing the [tax] rate down.”
3rd Ward Councilman Mike Russo expressed frustration over the fact that the city starts each year about $15 million in the hole due to constantly borrowing money of projects.
“We need to think long term, but we need to think long term with all of our decisions. This amendment uses surplus, which I’m in favor of. So every year when we vote on the budget, we pick an arbitrary number and say that’s what we think the city’s gonna be run with, that’s the amount of money we need,” he stated.
“And every dollar that we don’t spend we put into this rainy day fund. We do that in the general surplus, we do that at the parking utility, we do that at the water utility, and we do that with our health insurance fund. That’s four different buckets of money that we continue to put extra money away based on the taxes of the year before.”
Russo said residents are bearing the burden of increased costs for the city rather than tapping into any of those rainy day funds: “for me it’s pouring,” he added.
He also called an eight-and-a-half to nine percent tax increase in the average Hoboken resident’s overall tax bill “absolutely absurd” and that the current municipal spending levels are unsustainable, as well as calling for more ratables.
1st Ward Councilman Paul Presinzano lamented that constituents often reach out to him about how the city has become unaffordable and yet the city seems incapable of curtailing their own spending.
” … I don’t want to hear that your for affordability and yet you’re for increasing taxes. There’s one thing I do know that we do need to control our spending when we have the ability in good times. Because when it’s bad times, you gotta make some really tough decisions,” he said.
“And those tough decisions are just you have to slash. Because the taxpayer is getting hurt pretty hard. So when i look at this and as I propose some of those cuts that Councilman Russo had spoken about. And mind you, this was not a light discussion.”
4th Ward Councilman Ruben Ramos indicated that he would’ve preferred to use even a little bit more of their surplus to get the tax rate down even further, acknowledging that they have no control over the board of education and county budgets.
He also said he supports bonding when it’s for essential services, like a mobile police precinct, but it should not be used regularly.
On the other hand, 5th Ward Councilman Phil Cohen said that the spending plan before them is largely composed of fixed expenses beyond their control, such as pension payments, debt services, employee health insurance plans, and contracts for police and fire unions.
“There’s very little in this budget that we’re talking about that’s discretionary. A lot of this stuff is baked into the operations of the city. I take issue with the idea that our surplus is a rainy day fund to be used when the weather is bad and it’s just sitting there doing nothing,” he stated.
“And we should just use it and spend it down to help our taxpayers. The rating agencies that look at the City of Hoboken look to see whether we have a sustainable surplus: sustainable, responsible, surplus.”
Cohen indicated that some of his colleagues sat on the dais when the city was at junk bond status, a far cry from the double A plus rating they have now, and that could see a downward trend if they use up a significant portion of their surplus now.
He also noted that the amendments proposed would drop the overall Hoboken tax increase of about 9.3 percent to 8.8 percent, which is not worth jeopardizing the city’s credit rating again.
Fisher argued that the amendments would not have any impact on the city’s credit rating, noting that the parking utility has an additional $4 million simply by the city overbudgeting.
She also said that because Hoboken taxpayers are so diligent with paying on time, as well as because the city has a high average household income, a point echoed by Ramos.
Additionally, Councilman-at-Large Joe Quintero said that the city’s credit rating wasn’t like a personal credit score, but rather more like applying for a bank loan or a mortgage since they look at timely payments and your savings account.
He said that spending the surplus would “cause some pain next year,” to which Fisher interrupted and said that is not what’s happening here.
“He is misinforming the community, we’re not dipping into that surplus,” Fisher yelled.
“Wait until I finish and speak after. I afford every single person on this dais the opportunity to speak and if I have an issue with what they’re saying, then I wait, and speak my turn. That repeatedly does not happen with me,” an annoyed Quintero replied.
Prior to the vote on the amendments, Councilwoman-at-Large Emily Jabbour reiterated that Hoboken has the lowest tax rate in Hudson County and that services are never going to get cheaper.
“No one likes paying taxes, I don’t want to see my tax bill go up, you don’t want to see your tax bill go up, I understand that very clear reality. There are differences in that reality politically and in that reality when it comes to policy making and the actual work that we are responsible to do as financial stewards of the city,” she began.
“But unfortunately, things cost money. That is the reality … We are not unique. This is the same challenge that all the municipalities in the state are dealing with, certainly in Hudson County. And if you look up the road at North Bergen, their residents are dealing with a 10 percent tax increase municipally. That’s the reality.”
The amendments were approved 5-4, with Presinzano, Fisher, Russo, Ramos, and Council President Jen Giattino voting yes.
However, the overall budget ended up being voted down 7-2, with only Fisher and Giattino voting yes, meaning that it’s now back to the drawing board for the fifth time this cycle.
The much touted splash pad in the brand new 100 million dollar NW Park doesn’t work.
Why they don’t know.
Who gets to pay for the very expensive fix ?
The Bhalla Administration don’t know or won’t say.
pension costs,healthcare costs.which is not a lie but a scapegoat is needed so they blame municipal employee costs(the little guy who cohen knows nothing about unless its voting season and he can be someones biggest cheerleader), public saftey salarys are a much bigger chunk of the budget.they will talk about that because there is no such thing as wasteful spending here and honestly no one has any issue with the wild west that is the Boe budget.
Sounds like the Ravi lunatics on the City Council voted down the budget because their colleagues made efforts to reduce the tax increase and that makes Ravi look bad.
So they voted it down after the amendment passed, for spite.
Yes, Emily, things do cost money and the time to think about that is during the first 50 weeks of the fiscal year, when the photo ops and re-election campaigns are happening, not as the clock runs out. How much has the Administration staff grown in the past 6+ years and how much of that was patronage driven? How much do we spend on legal fees because our projects are so poorly conceived? Dawn Zimmer ran this city with its residents in mind and our current Mayor runs it as a political opportunist, and that’s what costs money. Saying Hoboken is experiencing the lowest % increases in Hudson County is absolutely ridiculous; we are among the most heavily taxed states in the country.
It’s not Just a Bhalla tax hike, it’s an Emily, Joe, Phil, Jim and Ravi INCREASE
Don’t forget the 25 mil Municipal Palace and the 500 million dollar Sports Complex with 25 classrooms AKA ( ” High School”)
The Super Mom loves Super high taxes.