JERSEY CITY, NJ - A $70 million shortfall in municipal revenues brought on by the COVID-19 public health crisis may result in city employee layoffs, city officials have said. “We haven’t received anything from the administration yet, but it’s being discussed,” Councilman James Solomon told TAPinto Jersey City.

Mayor Steven Fulop has said the city needs to take steps to reduce the potential of a tax increase, largely because Jersey City residents are already facing hikes in school and county taxes, and many are facing their own financial hardships as a result of the pandemic.

“We are looking at all options as we don’t want to burden taxpayers further than what they are experiencing due to COVID,” Fulop said. “We haven’t commented much as we are structuring  a plan now on how and what steps will be taken.”

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The Administration presented the city council with the $612 million budget at the July 15 meeting but will not vote on the spending plan until September at the earliest. Fulop said he is anticipating layoffs, though these would be minimal.

This is a significant change from when Fulop introduced the budget in January, anticipating then another year without an increase in taxes. Jersey City, prior to this year, had seen no increase six out of eight years.

Coming into 2020, Fulop said, the city established an audit review team to ensure that the local government is operating at the highest efficiency at the lowest cost. His goal was to generate revenue while restructuring several departments to help improve the bottom line.

The budget, which Fulop introduced two months earlier than usual because he anticipated a large jump in taxes charged by the Jersey City Board of Education, had anticipated increases in public safety and investment in after school programs.

He and the now deceased Ward D Council Michael Yun were at the time working on a plan to help balance the school budget – which included funding through a payroll tax.

A state of emergency due to COVID-19 was declared in March, changing the whole fiscal landscape. The city faced increases in public safety and other costs and could no longer guarantee the payroll tax.

Some layoffs apparently have already taken place, said Councilman Rolando Lavarro.

“One employee wrote the council and thanked us,” Lavarro said. “He had received a letter from the HR Department saying the layoffs are COVID related.”

The city council, Lavarro added, held budget hearings on revenues as the council does every year. “With the pandemic, these had new meaning,” 

“While the situation is serious, the numbers do not seem as dire.” He said the shortage of revenues and increased expenditures are in line with what the council was presented last March. “We expect to get reimbursed for some of these from the federal government.”

Some of these are split with the school district and so this isn’t completely on the shoulders of the municipal government – although the district will likely seek relief from the city. “I’m not sure yet how we will handle that,” Lavarro admitted.

But the city has already taken some measures to reduce costs such as suspending part time and seasonal work from when the pandemic hit last March.

“We’ve also offered early retirement and a number of employees have taken this,” the councilman said, adding that a plan to have police and firefighters pay for a greater percent of healthcare costs was rejected by one of the police unions, leading to the possibility of demotions for some high-ranking police officers, in an effort to get them to accept their own early retirements as was originally anticipated. 

“I have a hard time believing we didn’t’ fill that gap already with the things we’ve already done,” Lavarro said, noting he is seeking a report on the revenues before the council votes.

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