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Budget Battle Puts City Employees' Next Paychecks in Jeopardy

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PATERSON, NJ – Next week’s regular paychecks for about 1,600 Paterson employees hinge on whether the City Council approves a temporary municipal budget for September at its meeting on Tuesday.

The city has enough cash in the bank to cover the paychecks, but state law says the administration needs the city council’s approval to spend the money. The council so far has signed off on $38 million worth of temporary budgets for the current fiscal year’s first two months, July and August.

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That money is running out and there’s not enough left to cover the city’s biweekly payroll of about $4 million for the checks that are due on September 14, according to city budget director Russell Forenza.

The administration’s proposed temporary budget for September fell one vote short of approval at the council’s August 21 meeting.  Five council members voted in favor of it – President Anthony Davis, Mohammed Akhtaruzzaman, Kenneth McDaniel, William McKoy and Andre Sayegh. Three voted against it Kenneth Morris, Rigo Rodriguez and Julio Tavarez, while one member was absent – Ruby Cotton.

Budget resolutions require six affirmative votes for passage. Cotton could give the temporary budget the sixth vote it needs, but Sayegh has said he would not vote for another temporary budget unless the administration presents the council with a preliminary 2013 budget by September. On Friday, Sayegh seemed to back away from that position, saying he would have to take into consideration the plight of city workers who may not get paid when decided what to do about Tuesday’s vote.

Council members who have voted against the budget have criticized the administration for what they called its lack of progress in putting together the 2013 spending plan. Morris and Tavarez, in particular, have asserted they wanted to try to force the administration to craft its budget as soon as possible.

In each of the past two years, the budget was not approved until about two-thirds of the fiscal year had elapsed. As a result, last-minute cuts had minimal impact on the bottom line because most of the money already had been spent. In 2011, Paterson endured a 29-percent tax increase and layoffs of almost 400 workers. Last year, the tax increase was about three percent.

Forenza said the administration’s budget for the first three months of fiscal 2013 was about $5.7 million lower than was spent during that same time period last year.

Paterson is looking at a structural deficit of $10 million in its 2013 budget, plus the city has to cover a $3.7 million shortfall left from 2012.

Officials plan to begin departmental budget hearings on Sept. 19.

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