Projected $7M budget deficit could equate to 80 layoffs in Hoboken, official says

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An early projected budget deficit of $7 million for the upcoming fiscal year could potentially equate to 80 layoffs among municipal employees, Hoboken Business Administrator Stephen Marks said at last night’s city council meeting.

“We’re potentially talking about a citywide layoff plan: I just want to make sure that everyone understands the fact, if there are in fact cuts, especially in salary and wages, that will affect their pay into the future – we’re going to start paying at a certain range right now,” began 3rd Ward Councilman Mike Russo.

His remarks came while the council was considering a resolution authorizing temporary appropriations for the 2020 budget.

1st Ward Councilman Mike DeFusco questioned what the implications would be if the council voted down the measure in front of them, with the answer being that the municipal government would not have the funds necessary to remain in operations.

“Do you find it professional to have omitted a large percentage of this governing body, in advance of this vote, knowing there are significant shortfalls in our budget? Because this is absolute news to me in the last two weeks, that this administration has been operating in the deficit spending mindset,” DeFusco continued.

“This temporary budget, by law, is set at 26.25 percent of the previous year’s spending. It is temporary: it gets us through the first three months,” Marks explained.

“The city council, in the past, has scheduled hearings for the introduction of the full year budget, so this basically gets us started for the 2020 calendar or fiscal year and it will be up to the city council to set the spending limit for each department, for each division, throughout the year, during that process.”

Based on last year’s roughly $117 million budget, the figure in front of the council last night was approximately $30,712,500.

While indicating that he would be willing to work with the administration going forward, DeFusco expressed further frustration with “the garbage budget” the council has to use as a starting point.

Upon being asked by 4th Ward Councilman Ruben Ramos how large the budget shortfall is currently projected to be, Marks said that the 2019 pension payment is up around $600,000 from 2018 and that the city’s health benefits plan is expected to cost $1.5 million more in 2020 than it did last year.

This, along with the facts that the parking utility and the municipal court are down a combined $1 million in revenue from 2018 (decreases of $400,000 and $600,000, respectively), the budget is currently looking at a shortfall of over $7 million, Marks stated.

He also mentioned that the collective bargaining agreements with all six of the cities labor unions need to be negotiated, which will involve binding arbitration at the state level, one example of “things that are beyond the control of the city.”

Russo pressed forward on the matter, insisting to know how many layoffs such a figure could cause among municipal employees.

“It looks like about 80 people,” Marks responded.

2nd Ward Councilwoman Tiffanie Fisher added that figure reflects the number of layoffs that would be projected without a tax increase, further stating that any plan would have to include both since the deficit exceeds the cap bank – which currently sits at approximately $6 million.

Ultimately, the resolution was approved by a vote of 7-2, with DeFusco and Russo voting no.

City spokesman Vijay Chaudhuri told HCV that the administration looks forward to working with the council on the budget in the face of “several unavoidable challenges” this year.

“Due to a number of non discretionary factors, including rising pension costs for municipal employees at the State level, higher costs of employee health benefits, and union contract obligations, the City budget – like other municipalities across the State – will face several unavoidable challenges for the 2020 fiscal year,” he said.

“The administration looks forward to collaborating with the City Council to examine any and all ways to provide both long term and short term financial viability for the City as well as providing a responsible budget to taxpayers in the months ahead.”

5 COMMENTS

  1. Pretty shocking news after the New Year holiday. Can’t believe this is how Ravi runs Hoboken. Good story but terrible news showing no leadership in the mayor’s office. So HobokenHorse was right again. Ok, time for those Ravi loons to eat more crow. 3-2-1 until they start crying how everyone who doesn’t love Ravi Bhalla for this is a racist.

  2. There’s absolutely no way this administration has the ability to cover for prior administrations’ terrible contracts AND run the current budget. Far too much for them to handle. I don’t know if having a state monitor come in again is the ultimate answer, but it would at least put much-needed oversight on the administration. Clearly they all the help they can get.

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