The city needs $65 million dollars from the taxpayers to pay its expenses this year, according to Judy Tripodi, the state-sent fiscal control monitor. That means that the municipal portion of the tax bill may nearly double.
However, that is only one portion of the tax bill that property owners in Hoboken pay. They actually pay a quarterly "overall tax" amount that is composed of municipal, school, and county taxes. The city budget only affects the municipal portion. The school and county budgets affect the other two parts of the equation, so while those amounts also increased this year, they did not rise as much as the city budget. Thus, "overall" taxes will not double this year - but they will still rise approximately 47 percent from last year.
Last year, the city's $92.6 million budget was funded by only $34 million in municipal taxes. But at the end of the fiscal year, the city still had a $10 million deficit it could not make up. That amount will now have to be paid over five years.
This year, the city will pay for $2 million of that deficit, but also has to contend with all of the expenses of the new fiscal year, which began this past July 1.
Tripodi has calculated which costs, present and past, need to be accounted for in this year's budget. She will use the estimate of the $65 million tax levy to send out first and second quarter tax bills as soon as possible.
Residents and property owners who pay separate "PILOT" (Payment in Lieu of Taxes) deals because their properties received a tax abatement or are tax exempt will not be affected.
Hoboken has a "structural deficit" - a recurring gap between expenses and revenues each year - that needs attention, according to a memo to the City Council from Tripodi.
The dollar amount
With the increase, the municipal tax rate alone (not counting county and school taxes) will rise from $10.63 to $22.11 per $1,000 of property owned, according to city CFO George DeStefano. The $22.11 is not a final number, DeStefano said, because it is a fiscal year rather than a calendar year number. So the actual city increase will probably end up being closer to 84 percent over the fiscal year, he said.
Thus, a person with a $250,000 house would have paid $2,657.50 in municipal taxes alone last year, and may have to pay $4,890 over this year - an increase in the municipal portion of $2,232 per year, when using the 84 percent estimate.
That equates to an increase of approximately $558 per quarter for the city portion, although further cuts may reduce the last two quarters.
With county and school taxes factored in, the overall tax rate will rise to $47.39 per $1,000 of property owned. So overall, someone owning a $250,000 house will have to pay a total of $11,847.50 in property taxes (including the city, schools and county) this year.
Cuts may change the amount later
Tripodi has also promised a "systematic review of all departments and all operations" to work with the administration and the council to reduce the amount of taxes needed to be collected in the third and fourth quarters.
The shortfall of $10 million from last year's budget will be spread over five years, with $2 million included in this budget.
The tax levy also takes into account $8 million in funds that the city has to keep in reserve because they had to send out tax bills late last year, resulting in a lower than usual percentage of taxes collected in time. The state mandates that when that happens, they must keep extra money on hand in case the collections are similarly low this year.
Another $16 million in "one-shot," or non-recurring, revenues from previous years (property deals and other money) are not going to be available this year, according to Tripodi's memo to the council.
Mayor David Roberts said in an interview last week that the levy could be brought down from $65 million to about $62 million before tax bills are sent out, and that the future tax impact could be lessened by further cuts and increased revenues.
Not me!
The City Council met last week, but would not consider formally accepting the estimated tax levy because no one on the council was willing to sponsor the resolution to adopt it. Three of the nine council members are said to be running for mayor next May, and others may run for re-election to their seats.
Since no action was taken by the council, Tripodi said in a statement last week that she will implement it in her authority as fiscal monitor.
At the meeting, the council members lamented the dramatic increase, as did numerous residents who spoke.
Councilwoman-at-Large Terry LaBruno said at the meeting, "It's like watching your child get raped, and there's nothing you can do about it."
The council also could not reach a consensus on how much money to appropriate for the city to spend while the city works out a final 2008-2009 budget for the year.
Council members Ruben Ramos, Jr., Peter Cammarano, Michael Russo, and Terry LaBruno were in favor of giving the administration three months' worth of appropriations, which is what the administration had asked for.
But councilpersons Dawn Zimmer, Peter Cunningham, and Theresa Castellano preferred to appropriate just one month and have the administration provide further information on city finances before extending the amount.
Councilwoman Beth Mason decided neither was the right approach, and voted against both measures.
Council president Nino Giacchi was busy for half of the meeting and was not present for the vote, although after the meeting he said he would have been in favor of appropriating one month for the administration.
Some confusion arose during the discussion and vote because Cunningham was advised by City Attorney Steven Kleinman to divide every item in the appropriations by thirds to amend it for one month instead of three. This necessitated a half-hour recess while Cunningham did the math at the dais.
"It's like watching your child get raped and there's nothing you can do about it."
- Terry LaBruno
________
Even when his calculations were completed, some council members questioned the accuracy and decided against backing the amended resolution.
State annoyed
Tripodi said through a city spokesperson on Thursday that the actions of the council "indicated a willingness to shut down all City Hall operation."
She said that it was her responsibility to keep the city running, so her intention was to approve the appropriations through December.
Cunningham said of the inaction of the council, "It was a pathetic evening."
Roberts agreed. "It was an exercise in government at its worst."
Cammarano was also not happy after the meeting. "We've gone from 50 percent government and 50 percent theatrics to 100 percent theatrics," he said.
Tripodi demands layoffs
Meanwhile, the day after the meeting, Tripodi came into City Hall on Thursday, Oct. 9 and wasted no time getting to work.
She has required all director, division chiefs, and supervisors to cut operating expenses of a minimum of 5 percent to go along with an aggressive layoff and demotion plan, retirements, and other cost-saving measures.
Tripodi has met with council members, although some people - including from the administration - are saying that Tripodi is not providing all the information they need to see where she came up with the new tax levy.
Won't speak to press or at meetings
She has also resolved not to attend the council meeting or speak directly to the press, leading some to question the "transparency" that Local Finance Board Director Susan Jacobucci promised when the fiscal intervention began.
Tripodi, through a city spokesperson, released this response on Thursday: "The statement that there is a lack of transparency because a fiscal monitor will not subject herself to the dramatics of the council meetings is incorrect an unfair."
Tripodi also told CFO George DeStefano and financial specialist Katheryn Kinney they were not required to attend meetings.
The state was forced to deal with the city's financial situation because toward the end of the last fiscal year, five of the nine City Council members declined to pass a resolution from the mayor asking the state for a waiver to increase the normal spending cap on a city budget. Because they did not get permission to increase spending over a certain percentage, they could not pass the budget as it was.
For questions or comments on this story, e-mail tcarroll@hudsonreporter.com.
At Wednesday's City Council meeting, several members of the public criticized the city's financial activities.
Resident Donna Antonucci, who said she had never attended a council meeting before last week, came to the microphone and berated the City Council for bloated city budget.
"I'm here to tell you that the answer to a budget deficit can't always be raising revenue. I am appalled at the fact that there is an $11 million deficit in this town."
Antonucci criticized having a public safety director, two acting chiefs (police and fire), and two retired chiefs collecting payments in the police and fire departments.
"Whenever somebody [loses their position] at my job - gets laid-off, miraculously finds another job - you know what, we can't hire. We have to suck it up and work later. So how about we have the Public Safety director do it for a year and see how it goes."
Forde Prigot, another vocal critic of the city's finances, couldn't understand what the city was paying for with its list of appropriations for the month, because of the lack of information provided on the city website.
After getting an explanation from Finance Committee Chairman Michael Russo, Prigot said, "Basically, we have a credit card balance that we're not paying off yet."
Jonathan Gordon classified the national financial situation as "perhaps the worst economic environment we've seen since the Great Depression ... and yet the Hoboken spending machine grinds on and on and on."
He added, "At some point when people do not have paychecks coming in, they can't pay these taxes; they can't pay the bills that you people are asking them to pay."
Former Fire Chief Richard Tremitiedi wondered why no financial representative from the administration was at the meeting. In fact, the state's monitor had told two members of the city's Finance Department that they didn't have to attend meetings.
Tremitiedi said, "By the mistakes of the administration - whether honest, whether deliberate, whether incompetency, or just plain human error - all the taxpayers are paying for the mistakes. They are the patsies, and right now there's nobody here to answer their questions."
Michael Lenz, who said he had been warning the city about this situation for some time, gave a somewhat bright outlook to the terrible state of affairs.
"After great tragedies, there are moments when people can focus and do great things," he said. "Sometimes those moments are lost, and I think it's important not to lose this one." - TJC
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