Surplus
Jul 14, 2013 | 1279 views | 1 1 comments | 9 9 recommendations | email to a friend | print

Dear Editor:

As a taxpayer and a candidate for City Council, I believe everyone should be familiar with the municipal budget. While going through the line items, I was surprised to see that $9.8 million of the city’s anticipated surplus listed as a revenue item. There are several implications to this action.

First, it is the only way the City could craft the bloated CY2013 budget without a tax increase for residents. If the Administration had chosen not to list the surplus as a revenue item, the City would have had to raise taxes an astounding 19.5 percent to balance the budget.

Second, this means that none of the surplus, which the mayor has touted in her State of the City addresses as a “rainy day fund,” was completely untouched following Sandy. In fact, the Administration bonded for 100 percent of the Sandy-related cleanup costs in order to preserve the surplus, which is now being used for cost overruns in the budget instead of disaster relief.

Considering both of these facts, it is obvious that the City knew a tax increase would be unavoidable without the use of the surplus to plug budget holes. Therefore, it was stubbornly maintained, going neither to Sandy or taxpayer relief in previous years, and is now being used to cover for an excessive budget. I would like to acknowledge and thank Council Members Castellano and Occhipinti for sponsoring cost-cutting amendments to the budget.

I think it is important for the people of Hoboken to know that this is how the much-touted surplus has been used - not as a relief and recovery piggy bank, but as an election-year gimmick to make the Mayor look like she knows how to responsibly handle city finances. We can do better.

Sincerely,
Eduardo Gonzalez
Candidate, City Council At-Large

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ss1959
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July 20, 2013
Eduardo Public Finance 101 states that a governmental unit should maintain a 5-10% budget surplus. The 2013 adopted budget is $103 million meaning that the correct surplus should be between $5.15 million and $10.3 million. Hoboken's current bond rating is just above junk. At some point in the near future we will no longer be able to finance our debt thru Hudson County. When that day occurs and we finance our own debt the costs to taxpayers will be much higher unless we obtain a high grade bond rating. The way to do that is to demonstrate fiscal conservatism and a healthy surplus. When emergencies like Sandy hit, yes we may get reimbursed, but until that time we still need funds to temporarily pay the bills. If your side gets your way we will find ourselves back to the situation when your running mate Ruben was in the majority. Remember those days- underfunded budgets and a state takeover?