HOBOKEN, NJ – The Hoboken City Council voted Wednesday night to approve a trimmed-down municipal budget, capping months of anxious debate over the financial state of the City.
When 2020 started, the City of Hoboken was already facing a multimillion-dollar budget deficit. Contract negotiations with unions and skyrocketing health care expenses, combined with shortfalls in revenue, created a situation where the City was facing a hole in its budget and surplus to the tune of $19.8 million dollars. Layoffs were announced as the Administration prepared to tackle a colossal fiscal crisis, prompting a vocal backlash from municipal employees.
Then COVID hit. The pandemic obviously complicated issues that were already pretty dire. Two-dozen city employees lost their jobs in late April. It wasn’t until July that the Administration was able to present a budget proposal, which called for a 9.8% municipal tax increase—the largest in years.
Reductions in county taxes offered a degree of relief for Hoboken residents, who are currently facing an onslaught of financial insecurity in the midst of the pandemic. A majority of City Council members voiced their dissatisfaction with the Administration’s proposed budget and sought even further cuts.
At Wednesday’s special budget meeting, tensions were characteristically high. By the time it was all over, the Council voted 8-1 to pass a $4.2M or 7.5% municipal tax levy increase for 2020. Much of the difference in the tax burden to Hoboken residents will reportedly be made up by CARES funding slated to be delivered over the next few months. In the meantime, that money will be taken from the City’s surplus to cover expenses.
“Thank you to the County of Hudson and the Hoboken City Council for working collaboratively with my administration to overcome the unprecedented challenges of a pandemic to pass the 2020 budget,” said Mayor Ravi Bhalla. “I'm proud that this budget maintains city services and invests in our future, while delivering one of Hoboken’s lowest overall tax increases in the last decade, at only .75% or an average of $70 per household.”
Those comments set off a firestorm of responses from council members who have taken issue with the mayor citing the pandemic as a factor, when Hoboken’s economic infirmity was a preexisting condition.
“Having known since January that we were facing a multimillion dollar budget deficit this year, it’s disingenuous for the Mayor to have blamed a global health crisis for his fiscal mismanagement, particularly after he targeted the positions of 79 hardworking employees before COVID-19 impacted Hoboken,” said First Ward Councilman Mike DeFusco.“It was unthinkable for him to fire 26 people before showing the City Council a budget and absolutely unacceptable for him to have proposed a nearly 10% tax increase amid an economic recession. I’ve long fought to cut city spending by eliminating politically connected contracts and have urged the administration to do more with less because the absence of doing so has led us to the fiscal crisis we’ve found ourselves in. Now is the time for the Mayor to follow the Council’s lead and reduce spending to prevent a hefty tax increase next year.”
In June, the City Council was forced to override a Mayoral veto in eliminating the Office of Constituent Affairs, a position that was re-instituted by the Bhalla Administration after his predecessor, Dawn Zimmer, had discontinued the office.
Fifth Ward Councilman Phil Cohen took a rosier view of the outcome, saying, “It’s been a long and winding road for the members of the City Council Finance Committee, but we have landed in a good place.” He added, “In the end, a strong collaborative effort between Hudson County and County Executive Tom DeGise, Mayor Bhalla’s Administration and the Hoboken City Council produced a solid bottom line result for the Hoboken taxpayer despite a year of unprecedented fiscal challenges due to COVID-19.”
Councilwoman Tiffanie Fisher, Co-Chair of the Revenue and Finance Subcommittee was significantly less cordial with her summation of the budget process.
“They say the sign of a person’s true character is how they respond to difficult times and Mayor Bhalla last night chose dishonesty and hypocrisy. Instead of owning his historically high tax increase of 9.8%, like Mayor Zimmer always did, he instead created a misleading narrative that better suits him, taking credit for the much lower overall tax rate that was driven by declines in Hoboken’s share of county taxes over which he had no control.” said Fisher.
“Thankfully my City Council colleagues were able to reduce his proposed increase by $1.3M to 7.5% which is still way too high reflecting a rudderless year with Mayor Bhalla guided more by headlines than financial discipline. As we look ahead to 2021 it is going to be imperative that the Council carefully oversee the mayor’s spending so Hoboken residents don’t see another big tax increase next year.”
Fisher then added, “We should actually thank Jersey City as it was their significant increase in development that drove the 8.5% reduction in Hoboken’s share of the Hudson County tax levies and provided a much appreciated offset to Hoboken’s financial woes this year.”
The 2020 budget has been approved, primarily because a failure to do so would make it legally impossible for the City to collect taxes in the fourth quarter. Nevertheless, the main factors impacting the budget—union contract negotiations, health care costs—remain unanswered.
As that can has been kicked down the road, it’s sure to make a loud rattle in 2021, ahead of the Hoboken Mayoral election.
“A 7.5% municipal tax increase is nothing to be proud of," echoed Fourth Ward Councilman Ruben Ramos, Jr. "I’m pleased that we were able to lower the overall tax increase to 0.75%. My goal was to do whatever we can to make this year's overall increase as negligible as possible. Next year's budget will be even more difficult, and we can not rely on our surrounding municipalities to bail us out because COVID has wreaked havoc on future budgets with the potential increase of tax appeals in the year 2021." He added, "This budget is also a reflection of the spend first ask questions later policy of the last decade”.
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