Bayonne’s portion of county taxes dropped marginally by about 1 percent, county officials said, although this could change in the future as waterfront development kicks in, boosting the value of properties for new and existing residential development.
On June 26, the Hudson County Freeholders passed the budget, with three of the freeholders that represent portions of Jersey City voting against it.
Freeholders Bill O’Dea, Junior Maldonado, and Anthony Romano (who also represents Hoboken) voted against the budget.
“This is not an attack on the county executive or the freeholders,” Romano said. “Basically I’m angry at the state formula that is used to calculate the tax increases.”
The state formula requires the towns that see the most increase in ratables during the prior year to pay a larger portion of the county tax. While new development often means a municipality will see a higher tax on the county level, county taxes can rise even without additional development.
“It has to do with the equalization formula,” said Weehawken Mayor Richard Turner, whose town saw a minor increase this year after nearly four years of hefty increases.
“For the last four years, we must have gone up $1 million a year,” Turner said. “Since Weehawken, Hoboken, and Secaucus are seen as the wealthiest towns, we usually see the greatest impact. I’m glad for Secaucus this year, and I’m glad for us, too.”
Turner said with only a moderate increase in Weehawken, and slightly lower school taxes this year, and stable municipal taxes, this year turned out to be easier to handle.
“Last year, we requested the freeholder hold public hearings around the county in places like Secaucus,” Turner said. “While cutting spending helps, which is what they did for Hoboken this year, it is the equalization formula that determines which towns get hit the hardest. Since Hoboken is seen as a wealthy town, it will always get hard.”
Some towns get a break in the formula because they may be recovering from the recession more slowly than towns like Secaucus, Weehawken, and Hoboken, Turner said.
Romano said the county needs to lobby its legislators on the state level to change the formula so that the tax burden gets spread out more evenly.
“This is just not fair,” Romano said. “Both towns I represent are seeing increases, and there is only so much we can do on a county level to deal with it.”
The county budget is also based on full assessed value, and not a percentage of value as it is sometimes calculated for municipal and school taxes.
For Secaucus, Mayor Michael Gonnelli the reduction in what Secaucus owes to the county is a pleasant relief after several years of shouldering the increased burden. He said Secaucus will see a 4 percent decrease in its county obligation.
Hoboken’s revaluation hurt
What taxes a town pays or not can vary sharply from year to year, as with Secaucus.
The freeholders, however, made a number of cuts that reduced Hoboken’s increase from originally proposed 18 percent (about $61 million) to 14.9 percent. This means that a home assessed at $552,340 will see an increase of $378 in the county portion of their taxes.
Jersey City meanwhile saw only a moderate cut in the increase from a proposed $102.3 million to $101.6 million, which means taxes will go up about $100 per year on a home assessed at $93,000.
Romano, who had struggled for awhile on whether to vote for or against the budget said the state, has to deal with the issue since it is a state formula that is the problem, and the county cannot change it on its own.
Some towns did better than others
Although Freeholder Chairman Jose Munoz oversaw hearings in every department with the aim of making deep cuts, various costs increased, such as the living wage provisions in contracts for vendors doing business with the county, and debt obligations.
Like Secaucus, Union City will see a 4 percent decrease in its obligation to the county, although West New York saw the deepest cut at 4.9 percent.
While towns like Hoboken, Secaucus, and Weehawken get hurt by the state formula, cities like Union City which are generally considered poorer towns benefit most, Romano said.
This means that state officials will have to find some compromise that will not create too much of an impact on poorer towns, while helping to reduce the burden on wealthy towns.
But poorer towns sometimes find themselves paying a greater percentage, O’Dea said, especially during a recession such as the one that hit in 2008.
“The value of homes in places like Jersey City or Hoboken also falls faster during recessions, and so towns like Union City, where the value is more stable, wind up paying more in county taxes,” he said.
County officials also note that there is an inequity of services in reverse. Poorer towns often pay less of the overall county taxes, but also use more of the services that are geared toward poorer residents. One solution for the future may be to find a way for the county to give more services to those towns paying the greater share.
O’Dea said ultimately, the burden rests on the shoulders of county officials.
“The more we cut our spending, the less the impact,” he said. “I’m proud that we cut $2.2 million from this budget, but I’m sure we could have cut more. We need to cut as much as possible, because I do not see a way of changing the formula.”
Cities can hurt themselves by not aggressively seeking to collect taxes. The city and town must pay the county tax, and then must collect it from taxpayers.
The other way to control the county taxes to towns is to increase revenues from other sources.
“We have the speaker (of the state Assembly) here in Hudson County and we need to meet with him to discuss other revenue streams,” O’Dea said.
County considers hotel tax
One area being considered is the possible establishing of a county hotel tax that would be paid for by guests renting rooms in Hudson County hotels. O’Dea said a breakdown done for the county showed that a 1 percent tax on hotel rooms would have generated as much as $9 million this year, and combined with the cuts, would have resulted in a flat tax countywide. Several towns have local hotel taxes.
“While hotel owners might not like it, the impact would not be significant on the guests since our rates here in Hudson County are far lower than those in New York City,” O’Dea said.