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Trenton Says It Won't Send Any More Money to Solve City's Budget Deficit

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PATERSON, NJ – State officials say they will not bail Paterson out in its struggle to close this year’s lingering $5 million deficit.

During Tuesday’s city council meeting, Mayor Jeffrey Jones and Business Administrator Charles Thomas both said they had cut all they could from the budget during the past four months and would ask the state for extra help to close the shortfall.

But when asked on Wednesday about Paterson’s prospects for such a bail-out, New Jersey Department of Community Affairs (DCA) spokeswoman Lisa Ryan said,  “such a request would not be approved,’’ said Lisa Ryan

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Ryan cited a November 15, 2011 letter to Jones from Thomas H. Neff, the director of the DCA’s Division of Local Government Services , that said, “The State has no intention of providing additional aid or loans to assist with the imbalance that exists.’’

“I think the state has made its position very clear,’’ said City Council Finance Chairman Kenneth Morris. “I think it’s pushing water uphill for the administration to think they’re getting any help from the state to solve this.’’

Without a state bailout, Paterson is in fiscal trouble.  One option would be for city officials to increase the tax levy beyond the five-percent hike already on the table. “There is room to legally increase the tax levy further, but not to cover the City’s whole deficit,’’ said Ryan. But the City Council twice has refused to approve the mailing of the February tax bills because of the proposed tax increase and does not seem ready to agree to raise the levy any more, especially not two months before elections.

Meanwhile, because the city already has gone two-thirds of the way into its budget year, which means cutting spending accounts or salaries has minimal impact. For example, even if officials agreed to make $6 million worth of annual spending cuts effective next week, the savings would only amount to $2 million in the 2012 budget because so much time has passed.

The City Council is holding departmental hearings to try to cut the budget. Last Friday, it examined the community development and fire department budgets and trimmed about $300,000, officials said.  Tonight, it’s scheduled to review spending in two of its most costly departments – police and public works.

Councilman William McKoy acknowledged that the cuts being made during the departmental hearings are not likely to solve the deficit. But, he said, the cuts made in the hearings are important: “It’s an exercise in discipline we’re trying to demonstrate across the board,’’ McKoy said.

With the fire and community development departments, the council targeted line item spending proposals that exceeded the amounts spent last year. In those cases, the council reduced the line item to the 2011 figure, officials said. The council also cut funding in salary accounts for positions that had been vacant during the past year.

“We’re setting fiscal policy,’’ McKoy said. “A penny saved is a penny earned.’’

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