It has been six months since the city introduced its 2011 budget, and yet no spending plan has been adopted for a fiscal year that ends on Dec. 31.
Now, the state is taking notice and the added scrutiny may not bode well for Jersey City.
Mayor Jerramiah T. Healy introduced a $477.3 million budget back in March and a public hearing on the spending plan was held in April.
But adoption of the budget has been delayed for months, in part because the city has been looking for ways to close its structural deficit, a deficit the city had hoped to close with the help of a municipal land sale. But efforts to close this land deal have twice fallen through – most recently last week – forcing the city to move to what Business Administrator Jack Kelly last week called “Plan B.”
“There are late budgets – and then there are Jersey City late budgets.” – Steven Fulop
At the beginning of the year, the budget deficit was estimated by officials to be as much as $80 million for 2011.
Two weeks ago the city thought it had secured a deal with a developer to sell a 2.5-acre plot of municipal land near Jersey City Medical Center for $15 million. On Wednesday, however, city officials announced the deal is now dead.
That deal was at least the second one to fall through. Earlier this year another potential buyer signed a letter of intent to buy this site for $15 million, but backed out the deal in March. Other possible buyers have offered to buy the location, but for less money than the city’s $15 million asking price.
The state Local Finance Board has also questioned whether $15 million is a realistic sale price for this site.
City: We have a back-up plan
The administration said Wednesday evening that the loss of that project will not negatively affect the budget.
“We have been working on a Plan B for some time in the event that this deal was not finalized for this year’s budget, and have identified additional revenue sources and areas where cuts can be made,” Kelly said Monday evening. “We have been able to realize additional revenues that were not readily apparent earlier in the year and conservative revenue estimates have proved just that, conservative. Items such as PILOT revenues, receipts from delinquent taxes and hotel tax revenues have been realized above initial projections.”
A deal between the city and the Police Officers Benevolent Association saved $3.4 million this year and averted non-civilian lay-offs in the Jersey City Police Department.
The city has also laid-off 356 staff over the last 27 months to help close the budget gap. Since 2005, the entire city workforce has been reduced by 15 percent from 3,100 employees to 2,600. Last year, the city laid off nearly 300 seasonal and provisional employees.
Staffers who remain on the job are required to take 12 furlough days each year.
Despite these cuts and savings, resident John Seborowski chided Kelly at Wednesday night’s City Council meeting for not doing more to get the budget adopted sooner.
“I thought with you coming on board, and us changing from the fiscal year to the calendar year, things would be different,” Seborowski told Kelly. “I thought you’d be a little better than your predecessor. But we’re nine months into the year and you still cannot do it.”
Firing back, Kelly said, “The city for the first time, from my understanding, presented pursuant to state guidelines, a budget early in the year. This administration has not deviated from that spending plan. A budget is a 365-day a year program…Yes, this $15 million did not come to fruition. But we were looking at additional revenue, and additional spending cuts, as we do consistently.”
Kelly said at a special City Council meeting at 6 p.m. this Tuesday the administration will present to the council “new revenue and appropriation adjustments” that will offset the loss of projected income from the land sale. The meeting at City Hall is open to the public and public comments will be heard.
Fulop: That’s not how the state sees it
But Ward E City Councilman Steven Fulop, who said he has been in contact with state officials, said the state is concerned about the lack of an adopted spending plan in Jersey City.
“The state is very concerned. There are late budgets – and then there are Jersey City late budgets. The governor put a tax cap in place with a timeline for when budgets were supposed to be adopted.”
Fulop scoffed at the notion that budgets are a “12-month program,” arguing that taxpayers need ample time to plan if there’s any chance they may be hit with a tax increase.
A spokesman for Gov. Christopher Christie said the governor is indeed concerned about any municipality that adopts a budget nine months into the fiscal year, and such cases would likely be examined on a case-by-case basis.
He would not discuss what specific measures might be taken against such municipalities, but the state Local Finance Board has announced plans to fine cities that don’t adopt timely budgets without getting an extension from the state.
An e-mail sent to the state Department of Community Affairs press office seeking comment on possible repercussions to a late-year budget adoption was not answered by press time.
E-mail E. Assata Wright at email@example.com.