Paterson Top Stories

Budget Bluff? State Says No Way to City’s Hiring Plans; Sets 5% Tax Hike Target

City Hall


PATERSON, NJ – It seemed like Paterson was about to go on a hiring spree. In its application for state transitional aid, the city indicated it planned to add 231 jobs in 2012, the vast majority of them in so-called civilian positions.

The extra jobs would have increased the number of municipal employees by 15 percent and the city’s payroll for civilian workers would have jumped by $3.8 million, according to the application.

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The inclusion of the extra employees may have been a bureaucratic bluff, an attempt by Paterson officials to get more money from the state by making the city’s financial needs seem as great as possible. That’s the strategy Mayor Jeffrey Jones’ administration has said it was taking.

But officials in Trenton weren’t buying it. They quickly dismissed the possibility of the new hires, highlighting that issue in an October 9 letter telling Paterson that it would get $21 million in transitional aid this year, significantly less than the $47.7 million the city had requested. 

“The Division notes that the application for aid reflected a budget allowing for the hiring of hundreds of additional employees, which simply cannot be afforded,’’ said Thomas Neff, director of New Jersey’s Division of Local Government Services. “Holding the line on current employee levels would result in several million dollars of additional savings from the needs reflected in the application.’’

Neff’s letter also offered some reassurances about the city’s finances that some Paterson officials may not find so reassuring. Neff said the state would provide “the technical assistance” to help the city “balance its budget” with the inclusion of an approximate five-percent tax increase.

At present, the budget’s deficit of $26.7 million would produce a tax increase of roughly 20 percent. But reducing the size of the increase down to five-percent may not satisfy some city officials, especially after Paterson raised taxes by 29 percent last fiscal year.

“I’d have to talk to my constituents, but the consensus I’m getting is they don’t want any increase. They want to see a reduction,’’ said Councilman Andre Sayegh. “Five percent would be hard to swallow considering what just happened.’’

“Can we afford it? We can’t afford a one-percent tax increase,’’ said City Council President Anthony Davis. “But let me say this, it’s a plus from where we are now.’’

Davis said the city should take the state’s offer of help. “What we need is relief, from anywhere we can get it,’’ said the council president. “We have to be humble enough to accept it.’’

The city council has scheduled a special meeting about the budget for 7 pm on Wednesday, just prior to its 8 pm session that night to begin its inquiry on Paterson’s flood overtime.

The state’s transitional aid letter restated its insistence that city managers return the inappropriate overtime they had received for flood relief efforts and told the mayor “to further ensure that no overtime is paid to management in the future.’’

Several city managers – including Business Administator Charles Thomas, Public Works Director Christopher Coke and Personnel Director Betty Taylor – had been getting paid overtime prior to the flood, according to municipal payroll records.

Neff’s letter did not say whether the questionable overtime was a factor in the state’s decision on Paterson’s transitional aid application. But city officials and residents have expressed concerns that the flood overtime would Paterson’s chances of getting as much money as possible.

Neff’s letter offered Paterson several suggestions for cutting its preliminary 2012 budget:

  • A $3 million reduction in its pension payments, part of a statewide cut being allowed by the New Jersey Treasury Department.
  • A two-year payment plan to spread out the $3.4 million in unemployment benefits that Paterson owes the New Jersey Department of Labor to cover benefits checks for city employees laid off during the past year.
  • Restructuring the city’s debt so that loans are repaid over 20 years instead of 15 years, a move that would reduce the annual payment in this year’s budget.
  • An increase in sewer fees so the cost of that service does not show up in the municipal budget. Council members have balked at the prospect of a sewer fee hike, but supporters of that plan say it would increase the amount of money that tax-exempt property owners pay to the city and decrease homeowners’ share.

Last spring, the city administration had proposed raising sewer fees by 100 percent to comply with the state’s plan, but the city council balked at that. Neff’s letter, however, said the city could phase the sewer fee increase in over three years, a possibility that seemed more acceptable to Sayegh and Davis.

“We might be amenable to that,’’ Sayegh said.

“We have to do it,’’ said Davis. “It’s the only way we can get the non-profits, the churches and the schools to pay.’’

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