North Bergen Township’s municipal government and its Board of Education will lose millions of dollars in state aid for their budgets during the next fiscal year thanks to statewide aid cuts from Gov. Christopher Christie. As a result, township officials are predicting layoffs, higher taxes, and reduced services.
To compensate for the cuts, a taxpayer owning a $140,000 house could be hit with a tax increase of $585 next year in combined municipal and school taxes, local officials said, and the county portion of the tax rate has not yet been set.
The fiscal year starts next July 1 and ends June 30, 2011.
“We all expected some cut in state aid, but to this level, it is almost not manageable,” said Township Administrator Christopher Pianese last week.
“There is a huge hole in the budget and it is everybody’s responsibility to try and make it right.” – Robert Dandorph
For North Bergen, the state reduced the township’s municipal aid by 17.4 percent, meaning the municipality will lose about $2 million in aid for its annual budget, said Pianese.
Pianese said that loss is compounded by the fact that the township’s Urban Enterprise Zone funds – which come from sales tax in the township’s business district and are supposed to go back to the district for projects and public safety – have been frozen by Christie for months now. The funds paid for some police and Department of Public Works salaries. The frozen funds have also stopped completion of projects, such as the left-hand turn lane into the recent mall developed at Tonnelle Avenue and 91st Street.
Pianese said that if the next municipal budget exceeds the state’s 4 percent cap for tax increases, their state aid could be cut by another 5 percent.
Also, Pianese said that Christie’s budget no longer contains the Regional Efficiency Aid Program (REAP), which had given rebates to homeowners in the North Hudson Regional Fire and Rescue’s service area.
Because of the state aid cut to the budget, the UEZ freeze, and the REAP cancellation, Pianese does not believe the UEZ program will last past June if the funds are not released. That could lead to the cancellation of programs for job creation, incentives for business creation, and an end to the special lower 3.5 per cent sales tax UEZ businesses can charge.
“We have instructed the departments to come back with 10 percent reductions in the budget lines, anticipating that the aid is not going to be restored,” said Pianese.
Pianese expects the township to lose around $4 to $5 million in aid and funds for the next budget.
How can a town make up for such cuts? They either have to cut spending somehow (perhaps by eliminating services or jobs) or find other sources of revenue, like taxes.
Looking for cuts
Pianese said that layoffs and furloughs are possibilities right now.
After offering health insurance waivers for employees who were covered under other health insurance, aggressively going after new sources of revenue, and lowering the township’s debt, the township now feels like it is being punished for being fiscally sound, said Pianese.
Mayor Nicholas Sacco said that he would continue to fight state mandates and for the future of the UEZ through his position as a state senator.
“The UEZ cut is a disaster to the business community and the people of the town,” he said. “The choice would be to lay off a lot of people and cut some services, not do the turning lane, which is critical to the mall, or increase taxes, which you wouldn’t want to do.”
He said that losing REAP will immediately cause higher taxes.
“Since 1994 [when our administration took office], we haven’t given an increase [in taxes] above the cost of living,” said Sacco. “Right now our hands are tied.”
Schools expect more than 50 layoffs
The North Bergen Board of Education was allotted 7.5 percent less in state aid, losing $4.4 million.
At a somber board meeting on March 31, the 2010-2011 budget was approved. It then goes to the voters for a public vote on April 20.
The $111.1 million budget is relying on $39.9 million from the tax levy, $51.1 million from the state, $6.4 million from federal sources, and $10 million in grants, and other sources.
According to school board Business Administrator Steven Somick, the district utilized about $3 million in surplus capital funds to try to make up the lost funds, but the additional savings required reducing faculty.
According to Somick, homeowners will see a 3.92 increase in their school taxes, amounting to $85 per $140,000 assessed house.
Superintendent Robert Dandorph said that around 30 teachers, 25 teachers’ aides, administrators, and two to three custodians face lay offs.
The remedial math program may also be eliminated and replaced with a “push-in” program in which remedial students are pushed into regular classes but will get extra focus from a teacher or teacher’s aide.
“We’re losing some really good teachers,” said Dandorph.
He said that class sizes will be larger next year, with three to four additional students in each one.
Somick said that staff would be notified in a few weeks after the budget is finalized, but in a state experiencing massive layoffs for teachers, it will be difficult for them to find employment.
“I think Gov. Christie has a lot of good points,” said Dandorph. “There is a huge hole in the [state] budget and it is everybody’s responsibility to try and make it right.”
Tricia Tirella may be reached at TriciaT@hudsonreporter.com.