After many months of deliberations, the Hoboken City Council okayed a $117.8 million amended budget that uses an additional $1.3 million in surplus, meaning that the municipal tax increase is 7.5 percent and the overall tax increase is 0.75 percent.
After voting down the budget last week, which had a municipal tax increase of 9.8 percent and a overall tax increase of 1.4 percent, the council convened a special meeting to decide if they wanted to increase the surplus used from $8.5 million to $9.8 million.
“It was frustrating to hear certain council members [say] ‘why is this council dragging its feet in approving the budget?’ Well, it’s because we thought we could present a better budget,” said 1st Ward Councilman Mike DeFusco.
” … We’re here now because we have a budget that’s going to work better for residents. That’s not going to pass a tax increase during a recession and this is what the council should be doing.”
Councilwoman-at-Large Emily Jabbour, co-chair of the finance committee along with Fisher, expressed her dismay that DeFusco was teeing off on the administration since she didn’t feel he’d done anything to improve the current spending plant.
“Nothing in this budget reflects anything that you’ve put forward,” she exclaimed.
DeFusco, along with Fisher, were the most vocal electeds in pointing out that the chief reason the municipal tax increase wasn’t a detriment to residents was because the county approved a 6.52 percent tax decrease for Hoboken in their budget.
Jabbour also said that while the administration didn’t want to do 26 municipal employee layoffs in May, it was one of the few options that were on the table.
“As much as we may not be comfortable, and it’s not a happy story to talk about layoffs, that does result in savings over time. It’s not pretty, it’s not ideal: we all know that. The administration did the best they could to make that number as small as possible.”
DeFusco said it was “absolutely appalling” anyone was supportive of a 9.8 percent municipal tax increase, as he and Jabbour traded more jobs over the particulars of the budget – and beyond.
Council President Jen Giattino indicated that while Jabbour said at last week’s meeting that spending had been reduced, that wasn’t accurate, since she it was “taken from one department and shifted to another.”
To that end, Fisher said that she felt the administration had “a lack of understanding around the budget” dating back to the end of last year, stating that the perceived $7 million budget shortfall revealed in December was actually closer to $13 million.
Furthermore, 3rd Ward Councilman Mike Russo doubled down on his position that this year’s budget came with a significant municipal tax increase after a decade of exorbitant bonding for “personal pet projects” and said he couldn’t support a budget with any tax increase.
The discussion was far from over at that point though, as 5th Ward Councilman Phil Cohen praised Jabbour’s handling of the budget, as well as the council as a whole coming to a consensus, but wondered why “raiding the surplus” was necessary for most of his colleagues to vote yes.
Giattino responded that the $1.3 million being taken from the surplus is the same amount that the city is supposed to be reimbursed from the CARES Act, therefore she felt the impact on the surplus was a wash.
While Councilwoman-at-Large Vanessa Falco addressed the challenges of COVID-19, such as decreased parking revenue, she largely blamed the arduous budget process on “fiscal mismanagement.”
“What I’ve learned from this administration, and the previous administration, is that you can’t sustain a municipal budget on parking revenue. You also can’t keep spending and bonding on luxuries we can’t afford,” she began.
“And now we’re here and yes we have to use the surplus. The surplus [Mayor] Dawn Zimmer worked so hard to build up by not raising taxes, by increasing debt, and by filling budget gaps with money from the parking utility.”
After about another 15 minutes of back and forth, followed by a brief public comment session, the budget amendment passed 9-0, before the complete budget passed by a vote of 8-1, with Russo voting no.
Mayor Ravi Bhalla thanked the county and the city council for their efforts, noting that this tax increase should only have about a $70 annual tax increase per home.
“I’m proud that this budget maintains city services and invests in our future, while delivering one of Hoboken’s lowest overall tax increases in the last decade, at only .75% or an average of $70 per household,” he said last night, noting that he was thankful for being able to overcome the fiscal challenges of the pandemic.
That response drew daggers from both DeFusco and Fisher.
“I’ve long fought to cut city spending by eliminating politically connected contracts and have urged the administration to do more with less because the absence of doing so has led us to the fiscal crisis we’ve found ourselves in. Now is the time for the Mayor to follow the Council’s lead and reduce spending to prevent a hefty tax increase next year,” the councilman said.
“Instead of owning his historically high tax increase of 9.8%, like Mayor Zimmer always did, he instead created a misleading narrative that better suits him, taking credit for the much lower overall tax rate that was driven by declines in Hoboken’s share of county taxes over which he had no control,” Fisher added.