This year, Weehawken, Hoboken, Secaucus, and East Newark will see an increase of as much as 10 percent in their share of the county tax burden while the remaining municipalities in Hudson County will see a slight decline. Because of a state formula, increases fall hardest on communities that have seen a significant increase in development, and thus, their base of taxpaying properties.
Hudson County Executive Tom DeGise presented the 2013 fiscal year budget at a Monday, May 6 freeholder caucus, saying that declining property values caused most of the nearly $8 million increase from the 2012 budget. The freeholders voted to introduce the budget on Tuesday.
A public hearing will be held on June 11 at 6 p.m. to allow the general public to make recommendations before a final vote is held.
At a press conference on Wednesday at Hoboken City Hall, Weehawken Mayor Richard Turner, Secaucus Mayor Michael Gonnelli, and Hoboken Mayor Dawn Zimmer urged the Board of Chosen Freeholders to take a second look at the budget.
“We need you to work harder and tighten your belts,” said Zimmer.
Gonnelli said that the tax formula works against cities and towns that manage their budgets well. Turner said that he and his fellow mayors understood that the state formula was the main cause in the tax increases and that changing the formula would take many years, but that they believed there are many unnecessary expenditures in the county budget.
Chairman of the Board of Chosen Freeholders Anthony Romano, who represents Hoboken and parts of Jersey City, said that he will set up at least four special meetings with various county departments to see where possible spending cuts could be made. He also lamented the state’s formula, which he said he understood works unfairly against certain municipalities.
“The formula is unfair and it’s antiquated,” he said.
Dressed in a blue shirt and tan suit jacket, DeGise looked somber as he sat at the work table and spoke about the challenges in the 2013 budget – saying that he was not pleased to bring an increase, but that he had done all possible to keep it down.
The rare Monday caucus was called because Freeholder Jeff Dublin has become head of NJAC (the New Jersey Association of Counties) and many freeholders as well as the county executive were scheduled to attend its convention later in the week.
One more look
The introduction came later than usual because county officials wanted to give the budget another look for possible cuts before putting it on the table. The freeholders will have a chance to look at and possibly find other areas to cut before the June 11 meeting.
DeGise said Weehawken, Hoboken, Jersey City and Secaucus will bear the brunt of the increase because each town saw a significant amount of new construction which bolstered the portion that they have to pay.
County taxes are configured at full assessed value rather than the adjusted rate municipalities employ. New construction usually brings up the percentage of a municipal’s portion of the total value of taxable property within the county. While municipalities benefit on a local level from the increased ratable that can contribute to the tax base, this also causes the amount of their county tax share to rise.
“This is a classic meat and potatoes budget.” -- Tom DeGise
DeGise said the freeholders will get their chance to review and hopefully find places to cut the budget to reduce the cost further.
“This is a classic meat and potatoes budget,” DeGise said. “It has no artificial tax cuts, no one-time revenue items, but we see no cuts in services either.”
One of the significant issues is the shrinking tax base countywide. This year, the total value of taxable property dropped as a result of tax appeals by $1.6 billion. Over the last four years, DeGise said, the county total taxable property value has dropped by $12 billion. This means the county has to raise taxes in order to maintain services.
“I’m proud of the fact that we have been able to continue to provide quality services and that there have been no layoffs,” DeGise said.
Spending is up
Total spending is up by 3.2 percent from last year, and this, DeGise said, was due largely to contracted raises, increases in health care costs, and other uncontrollable impacts.
“I hope that you’ll find some cuts as you have in the past,” DeGise told the freeholders. “My administration will cooperate in every possible way. But we won’t fudge the numbers or take on one-time revenues.”
He said the budget complies with the stricter of two state imposed budget caps, although there are items that are outside the spending cap, which made the whole process complicated and challenging.
But the budget, he said, does include investments in county institutions such as the county college and the county high school.
“We are not going to build a new high school [as proposed years ago], which means we will have to do capital improvements to the existing high school campuses,” DeGise said.
More for the poor
Among the other services that this budget invests in are new 24-hour sheriff’s patrols throughout the county, funding for the Summer Youth Program, and continued services for the elderly, the poor, the unemployed, and the homeless.
“Those,” DeGise said, “are people who depend on the county for sustenance.”
He said on the positive side, the county’s favorable credit rating has allowed municipalities to save as much as $7 million over the last year in interest payments.
“The financial industry is looking at us positively, and we’re passing our good fortune on to our municipalities,” he said.
State formula is a problem
DeGise said state legislators continue to talk about changing the state formula that would allow the county simply to divide up the total tax amount evenly among the 12 municipalities, but after decades of debate, the formula still requires those communities who have increased their tax base over the last year to bear more of the burden.
“So towns that do well end up getting hurt,” he said, “while towns on the decline do better.”
He called it punishment for success, but said that it is also an indication that those towns are thriving and expanding.
East Newark sees the largest percent of change, followed by Weehawken, Secaucus and Hoboken. All the other municipalities actually see a decline.
Although Hoboken saw the largest increase in total value of more than $205 million in the ratable base over 2012, Weehawken’s total value rose by $179 million in 2012 made up a larger percentage of its total value. Secaucus, meanwhile, saw a total increase of $103 million during 2012.
In accepting the budget, the Freeholder Board will set up a review process over the next month that will look at each department in the county for possible cuts.
Al Sullivan may be reached at firstname.lastname@example.org.