Budget Snapshot: $1,360 Tax Increase on Average City House

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Paterson's finance officials at budget discussion
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PATERSON, NJ – Right now, Paterson’s 2012 budget is at a point where no one wants it to be. There’s a $22.8 million shortfall that would require a 17 percent tax increase, which amounts to a $1,360 hike on a house valued at the city average of $350,000, officials said Wednesday night.

“That’s a snapshot of where we currently are,’’ said Business Administrator Charles Thomas. “In no way do we want to end at this number or at this percentage.’’

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With harsh criticism that has become routine at Paterson government meetings, city council members urged Mayor Jeffrey Jones’ administration to complete a budget with no tax increase.

Councilman Kenneth Morris called the status of the budget “unconscionable.’’  Councilman Julio Tavarez said city spending needed to be brought under control. Councilman Aslon Goow warned that the number of abandoned homes in the city would double.

“If you worked overtime on the flooding, you’ve got to work overtime on this budget,’’ said Councilman Andre Sayegh.

After enduring a 29 percent tax increase last year under a budget that resulted in almost 400 layoffs, Paterson hardly seems ready for another fiscal crisis. But Thomas pointed out during Wednesday night’s budget discussion that Paterson is in far better position than it had been a year ago, when the deficit was tens of millions of dollars larger.

“We’re working as diligently to get the number as low as possible before it’s finally adopted,’’ Thomas said of the budget.

The city’s next step will be to hold a series of hearings for council members to examine the budget details for every city department. Those have yet to be scheduled.

Meanwhile, in its letter telling Paterson it will receive $21 million of the $47.7 million in state transition aid that the city applied for, the New Jersey Division of Local Government Services outlined several ways to cut the budget by millions of dollars that would have no impact on municipal services. Among them are restructuring the city’s debt payments and staggering payments to the state for unemployment checks for employees laid off last year.

There remains a major wild card in the city’s finances. The $21 million state aid is contingent upon the Legislature adopting a bill that would impose tougher monitoring requirements on distressed cities that get the transitional funding. Without passage of that bill, the governor has said he will only approve $10 million of transitional aid statewide. That would leave Paterson in a major bind.

“In reality, we have nothing,’’ Tavarez said, referring to the uncertainty of the state aid offer. “We have a paper which says we might give you $21 million.’’

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