According to Councilman Javier Inclan, the delay in adopting the proposed $9.7 million budget stems from the township's inability to collect $400,000 in owed municipal taxes.
"We're received only 86 percent in collected taxes," Inclan said. "In the last tax bills, there was a tremendous hike in the third and fourth quarter and there were a lot of people who were upset by the hike and just refused to pay. Some people didn't agree with the tax hike and decided they weren't paying the bill."
Since the township is missing $400,000 in tax revenue, they need to come up with an additional $400,000 in tax reserve for the new budget.
So Inclan said that upon the recommendation of township auditor Steven Wielkotz, the township has applied to the state's finance board for what is termed "extraordinary state assistance" to offset what could eventually mean another tax increase.
Guttenberg has applied for $1.3 million in state emergency finance aid to help the township get through the recent tax crunch.
"The state funds are allocated to municipalities that have big jumps in taxes for unusual circumstances," Inclan said.
Inclan said that the reason for the unusual circumstances centers on two one-time tax revenues - the sale of the township's fire houses to the North Hudson Regional Fire and Rescue squad and the added tax income that came with the development of the Bulls Ferry housing complex along the waterfront.
"We can't count on that revenue any more," Inclan said. "It was a one-shot deal."
Since the township applied for the aid from the state, officials from the state finance board have recommended that the township delay voting on adopting the budget until the state decides whether Guttenberg will receive the state aid.
Taxes could jump
However, if the state aid doesn't come through, residents of the township could really be up in arms. It is projected, without the state aid, that property taxes could jump at the rate of $2 per $1,000 of property owned, or $200 for an average home of $100,000. With the aid, the average homeowner would face a tax increase of only 20 or 30 cents per thousand, which is a little more reasonable.
Still, it means yet another tax increase for the residents of Guttenberg.
"It's a mess," Inclan admitted. "I don't like to blame the previous administration, but you can't have four years with tax cuts and not expect for it to come back to haunt you. We're now in a bind. We knew that coming into office. But if the people are unhappy, we're the ones who have to take care of them."
Mayor Robert Sabello said last week, "What basically happened was that [former mayor Peter] LaVilla went overboard with a few things and didn't prepare for a tax increase, and we hit the jackpot with a $3 million deficit in our lap. We didn't have a dime to pay anyone and had to call a bonding outfit to get us the $3 million. I am definitely concerned, but if we can hold the line and give the taxpayers just a slight increase, then they won't jump all over us. But we'll really be pinched if we don't get the state aid."
Sabello added, "I seem to think we can hold the line. As we look at it today, we're still getting some guidance into what steps we can take. We're going to make every effort to every source."
Inclan said that the state was not going to take it kindly that Guttenberg cannot collect the taxes that are owed to the township by property owners.
"I know that they can tell us that it's your problem, so go fix it," Inclan said. "But collecting taxes unfortunately is not like collecting rent. You can't knock on people's door and expect them to pay their property taxes. We will eventually recoup our losses in tax sales, but until the budget is done, we can't do anything."
Added Inclan, "For now, we have to live with this and that's why we're holding it up for now. I think people in town are upset because they saw their tax bills and it's not what they've been used to for the last four years." Inclan added that there are no prospects for further development in the town, considering there are no open spaces available for development.
"We're tapped," Inclan said. "It's not like Weehawken, which has all that land on the waterfront. They have a lot of potential for development. We're done."
Inclan then blasted former Guttenberg Mayor Peter LaVilla.
"Our taxes would be stable right now if things were done properly in the past," Inclan said. "After this go-round, our taxes will be stabilized. But we don't have any additions to the tax rate and we're not going to cut services, so the taxes have to go up. I think it was an extremely calculated political maneuver done by our former mayor, who promised he would cut taxes, did, then left town and left us with a tax increase in our laps."
The township should know within the next 30 days whether the plea to the state will be answered. For now, the township will continue to operate without a budget and anticipate further tax increases.