After a two-week delay, Jersey City residents will finally get an opportunity on Tuesday to speak out on the amended $490 million municipal budget for 2011 – a budget the City Council is likely to adopt immediately following the public hearing.
However, the adoption of the budget – almost 10 months into the year – will probably do little to quell debate over the city’s budgeting process and whether or not this spending plan holds the tax rate steady from 2010.
City Business Administrator Jack Kelly presented the revised budget this past Tuesday at a special City Council session. It detailed how the city will cover a $15 million funding gap left recently after a deal to sell a piece of municipal property to private owners fell apart. In a brief presentation, Kelly announced several small spending cuts and $6.5 million in previously unanticipated revenue.
‘I would challenge [the mayor] to find one resident who has a reduced city tax bill.’ – Steve Fulop
But critics of the administration of Mayor Jerramiah T. Healy argue that comparisons of the 2010 and 2011 budgets show that property owners will shell out millions more in taxes this year than last.
The amended 2011 calendar year budget calls for $215.1 million from the taxpayers. Two years ago, in the 2008-2009 fiscal year budget, the amount was only $151.2 million. For FY 2009-2010, it climbed to $185 million.
“It is upsetting that the amount to be raised by taxes is up significantly, year over year,” City Councilman Steven Fulop told the Reporter last week. “I know the mayor is telling people taxes are stable. To some people he is even saying he reduced taxes. But I would challenge him to find one resident who has a reduced city tax bill.”
A spokeswoman for Healy insisted that city taxes are not going up.
“There is no tax increase. It has to do with fiscal year budgets versus tax collection on a calendar year record,” said Jennifer Morrill. “In CY10, the city collected $210,650,041, and in CY11, the city proposes to collect $208,448,387.”
Taxes: Hike or no hike?
This marks the first year that Jersey City is using the calendar year as its fiscal year.
The city was on a fiscal year until June 30, 2010. The city then had a six-month transitional budget that ended Dec. 31, 2010.
The business administrator and the mayor insist property owners will not see a property tax increase in 2011. But the numbers don’t bear that out.
In addition to city taxes, the other two components of quarterly tax bills have also increased.
Under the county’s 2011 $472.4 million budget, Jersey City saw a very slight increase of a few dollars this year.
The education budget for the 2011-2012 school year is $630.7 million and includes a $104.4 million tax levy, an increase over last year.
A taxpayer with an assessed home worth $100,000 is paying $32 more, total, in school taxes and about $10 to $15 more, total, to the county this year.
For 18 years the Jersey City school system was completely under state control. During this period the amount of money city taxpayers contributed to the school system was capped at a low rate, according to School Board Trustee Sue Mack. Now that the school system is being returned to local control, local taxpayers must contribute significantly more to the school system.
Kelly: Budget introduction important, adoption not so much
At council meetings throughout the year, taxpayers have argued that the city’s delayed budget process has allowed the administration to increase spending each month through temporary appropriations that hide the true tax increase because it can be difficult to see the tax impact of incremental adjustments.
But administration officials say this claim is not accurate.
“We are constantly evaluating programs to see if there are any cost savings to be realized,” Kelly noted. “Should we be providing an STD clinic when there are four clinics that already provide that service?”
In an effort to hold taxes steady from last year, Healy’s administration has laid off staff, continued the 12-day furloughs for city workers, changed retiree health benefits, and cut such programs and services as the Jersey City Free Public Library and the Preventative Medicine Clinic.
Amended several times
In March, Healy introduced a proposed budget of $477.3 million, a spending plan that anticipated $215.1 million in property taxes. It was amended several times to reflect the city’s actual monthly spending patterns, even though it has not been passed in a final vote. Kelly defended this process, saying it allowed the City Council to object to specific cuts – such as the ones for the library and STD clinic, which were ultimately restored for this year. Kelly said the administration will try again next year to phase out the Preventative Medicine Clinic.
Since state statutes require municipalities to only include budget revenue that can be proven, rather than projected, Kelly said it’s difficult to adopt budgets earlier in the year.
“Many towns are just adopting their budgets now,” he said.
But Lisa Ryan, spokeswoman for the state Department of Community Affairs, said that of the 526 New Jersey municipalities on a calendar year, only six – including Jersey City – have yet to adopt a budget.
Fulop: No way to budget
Adopting a budget nearly 10 months into the year could have repercussions for taxpayers, and for the City Council. Ryan said, “We can fine governing body members individually, or even adopt a budget for a municipality, should it continually fail to do so on its own.”
According to Fulop, Gov. Chris Christie may have been on the verge of taking action against the city.
“The governor has threatened the city, via letters, on the Healy/Kelly budget practices and we were left scrambling to plug the hole from the property sale,” Fulop said. “I do have a problem with the budget practices, as it creates instability for families with no clear budget. One would not budget a business like this, not a household like this.”
Councilman David Donnelly agreed last week that budgeting needs to be done differently in the future.
“The one thing that we need to do is to plan out over several years. We’re always scraping our budgets together,” Donnelly said. “There are always one-shot, one-year revenues in our budgets. That means every year we’re always trying to find another set of one-shots to keep the budget balanced. So we need to be planning better.”
Kelly said that next year the city will do some things differently. For example, the city will almost certainly hire a commercial brokerage firm to handle the sale of municipal property.
E-mail E. Assata Wright at email@example.com.