As layoffs and budget shortfalls abound in the wake of COVID-19, Hoboken Mayor Ravi Bhalla has introduced the city’s 2020 municipal budget on Monday. In his announcement, Mayor Bhalla stated that the budget “overcomes unprecedented challenges due to the pandemic including significant revenue shortfalls with a balanced budget that maintains community services.” The budget, which includes a $5.5 million increase in the municipal purposes tax, still has to be approved by the council. Here’s the latest on the budget details and what council members have to say about it.
A Brief Budget Breakdown
With his announcement, Mayor Bhalla referenced the nearly $20 million budget shortfall Hoboken is facing this fiscal year. What could have caused such a large gap? Well, according to the administration, general increased costs and revenue losses account for about $7.4 million. Then there’s the $6.4 million reductions in regenerating surplus and $5.9 million in additional costs and lost revenue resulting from COVID-19. Read more on the budget gap and recent layoffs here.
Despite this, the budget does include funding for several major infrastructure and quality of life projects:
- Repaving over 40 blocks of streets and re-striping crosswalks and bike facilities city-wide
- Eliminating the line at the Parking Utility through online permits and by launching an appointments-based program
- Working with NJ TRANSIT to reduce crowding on the 126 Clinton Street and Willow Avenue routes through articulated buses and additional bus stops
- Ongoing construction of the new 5-acre Northwest Resiliency Park, improving the Maxwell Park dog runs, upgrading the Elysian Park playground safety surface Elysian Park, and upgrading the spray area at Stevens Park
- Supporting businesses by creating 12 streateries, 21 parklets, and over 150 expanded sidewalk cafes
- Completing the replacement of over 7,000 feet of antiquated water mains to reduce water main breaks
- Upgrading the South Waterfront Walkway with new pavers, 41 new trees, 200 native plants, and upgraded LED lighting
Read More: Hoboken City Hall Layoffs + Wednesday’s Council Meeting: What We Know
According to the administration, the mayor’s budget would close the gap by approximately $10.9 million. This is achieved through the use of “cost-cutting measures and new revenues,” and includes the use of $3.3 million of the city’s rainy-day fund {non-regenerating budget surplus}, and $5.5 million generated by the 9.8% increase in municipal purposes tax.
So What Does This Mean for Taxpayers?
The administration contends that the impact on taxpayers will be minimal. This is thanks to the fact that municipal taxes represent 33% of the total tax bill, with county taxes {36%}, schools {26%}, library {3%}, and open space {2%} constituting the remainder. With the decrease of Hoboken’s share of county taxes this year by 6%, the mayor’s statement reads, “the overall tax impact on property owners from the introduced budget would be an increase of 1.4%, which for the average assessed property in Hoboken of $522,000 corresponds to an annual increase of $115, or $9.50 per month.”
Hoboken Council Weighs In on Bhalla Budget
The introduction has led to some differing opinions on the council. But, in Hoboken, contention over budgets is nothing new. Just last month, Councilman Mike DeFusco called for a forensic audit of city finances and operational costs after the introduction of a special bond ordinance that would have allowed the administration to accept $4.7 million in cash from the Hoboken Public Library’s surplus. The city would then bond for the same amount to be repaid over the next 20 years, with interest.
See More: Hoboken City Council Votes on 5% Tax Levy Increase Tonight — What You Need to Know
The proposed municipal budget also drew DeFusco’s ire Monday. In an official statement sent to Hoboken Girl via press release, the councilman said, “Hoboken’s long existing budget woes are a direct result of a pattern of gross misspending, awarding politically connected contracts and giving out patronage jobs that we are now facing the consequences of,” DeFusco’s statement continues. “It is nothing shy of irresponsible for Mayor Bhalla to continue using a global health crisis as an excuse for years of poor financial planning, even after recovering $1.4 million in federal aid.”
Not so, says the administration. Vijay Chaudhuri, Director of Communications for the City, told Hoboken Girl via email on July 7 after this initial article was published, “From last year, the Mayor’s office has been significantly downsized with salaries reduced by over $100,000, as a result of doing more with less. Over the past three years during the Bhalla administration, including this budget, the legal department salaries and spending on legal fees have saved taxpayers nearly $1,000,000 thanks to utilization of in-house attorneys and reduction of outside counsel services.”
But the budget also gives Councilwoman Tiffanie Fisher, co-chair of the Budget and Finance Committee, pause. Fisher said to Hoboken Girl via email, “I am hoping that in a year where many are suffering financially that the Mayor’s budget and proposed almost 10% tax increase reflects the best possible outcome for Hoboken residents. However to date, what I have seen has shown few cost cutting measures, an overstatement of the negative impact of COVID, reliance on surplus and one time revenue sources, and kicking 2020 costs into 2021.”
Councilman Phil Cohen, on the other hand, supported the administration, saying to Hoboken Girl via email, “From my perspective on the Budget and Finance Committee, an extraordinary amount of work went into this budget, narrowing our budget gap by more than $14.7 million through serious belt-tightening, reduced expenditures, and major efforts to protect the taxpayer, which translates to an overall 1.4% tax increase in an extraordinary fiscal year.”
Councilwoman-at-large Emily Jabbour also expressed support, saying via email, “I am glad that the administration has introduced a budget that is both responsible and reasonable during an otherwise very difficult year. The proposed 1.4% increase comes at a time when Hoboken has continued to lead the country with respect to safe quality of life solutions — whether providing residents with free COVID testing or supporting local businesses through creative outdoor options to allow for reopening,” she shared. “While other cities are seeing massive tax increases due to COVID — such as NYC facing a shortfall in the billions — Hoboken is fortunate this year to have a budget with less than a $10 per month increase, which is great news for taxpayers during this pandemic. I look forward to working with my Council colleagues on the next phase of the budget process as we review the proposal budget and work together to adopt a budget that serves the needs of our community.”
Councilman-at-large Jim Doyle applauded the budget in an email to Hoboken Girl, “I am very happy that, in these very difficult financial times, the city has been able, through a confluence of events, to arrive at a budget with a very modest overall increase in the tax burden on our residents in the face of these challenges,” his statement read. “I commend the administration and those on the council who worked together to arrive at this point.”
Councilman Mike Russo, on the other ha nd, said he vehemently disagrees with any increase in taxes, especially now, when residents are facing such hardships. When asked for comment by Hoboken Girl, Russo stated, “Our job as a council and an administration is to reduce taxes for our residents. We want to provide the services we can and reduce their burden. Instead, we increased parking expenses, increased the open space tax, raised fines and fees across the board, instituted a SIDs {Sanitary and Improvement Districts} tax, and bonded for $250 million. We can’t keep taxing the same people over and over and calling it a different thing. We can’t keep drawing from the same well,” Russo remarked. “It’s time for everybody to sharpen their pencils and make some very difficult decisions.”
Councilman Ruben Ramos said to Hoboken Girl via email, “First, we should be thanking our surrounding municipalities for growing their ratable bases over the past few years. This budget shows Hoboken is a direct beneficiary from how other towns have developed themselves with our county tax rate being significantly reduced. If it weren’t for that, our budget shortfall and options to close the gap would have been much worse. This budget also shows how we need to responsibly grow our ratable base,” the councilman added. “Once again this budget shows how Hoboken can no longer continue to rely on one-time revenue usage such as parking utility, surplus, and now a potential bonding scheme, it’s simply not sustainable. I’m looking forward to working with my colleagues to adopt a responsible budget that meets all of our current and future community needs with the goal of avoiding kicking the can down the road that can negatively impact future budgets.”
We have reached out to additional councilmembers and will update with their response on the budget as they come in.
What Comes Next?
The municipal budget will be formally introduced to the council at its July 8th meeting this Wednesday. Public budget hearings hosted by the Budget and Finance Committee will follow in late July and early August. The council is set to vote on a final municipal budget at its August 19 meeting.
Stay tuned to Hoboken Girl for more on the budget process and the council’s reaction as this story develops.
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