$144M Hoboken Budget With Tax Increase Rejected, Hearings This Week

HOBOKEN, NJ — After five of the nine Hoboken City Council members voted to reject Mayor Ravi Bhalla's proposed $144.3 million budget on April 3, the spending plan will undergo hearings this week and next week to amend it. The proposed budget included a 5.9 percent tax increase from last year.

"Before we even had a chance to read the complete proposal, the mayor had already put out a press release with the administration's spin," said 3rd Ward Councilman Michael Russo in an emailed message to constituents on April 4, explaining his "No" vote. "This is a non-starter."

Hoboken property owners must pay overall taxes that are decided by the city budget, school budget, and county budget each year. The school budget will also include a tax increase.

Bhalla said in the city press release that much of the increase was due to fixed costs, including about $3 million in mandated state pension cost increases and $2 million increase in healthcare costs. He said other increases had stayed below the rate of inflation.

Among other expenses, salaries in the city's corporation counsel office, or city lawyers, will rise to $512,827 this year, up from $455,000 last year. The city also spends around $1 million in special lawyers and legal fees each year.

The average home in Hoboken will see a $168 increase this year if the present budget passes. According to NJ.com, the school budget (seen here) will add around $632.

Last year, Hoboken proposed a $136M budget with a 7 percent tax increase.

Russo said that he suspected that city administrators could take slight salary cuts, and that other cuts could be found.

"Our neighbors didn’t tighten their belts for the last five years just to see their government let them down like this," he wrote. "When a normal Hoboken family anticipates high fixed costs, they adjust variable costs accordingly—and we expect similar action from the administration. Couching this massive increase in language alleging that the tax rate is only slightly lower than 40-year-high inflation does not go far in alleviating the concerns of Hoboken residents."

See the budget as currently proposed here.

How To Join

Agendas and information for the hearings on Monday (5:30 p.m.) and on Tuesday (6 p.m.) are here.

• To participate and watch via Zoom, the instructions and links are here.
• You can normally watch council meetings on the city's Facebook page, or YouTube. Councilwoman Tiffanie Fisher said in an email late Monday that the administration was not going to stream the meetings those ways, and that she would not be participating on Monday as a result. The Zoom links went out Monday afternoon.

The city's initial press release on the budget is below.

Press release from the city of Hoboken:

The City of Hoboken today announced the introduction of the 2024 Municipal Budget, demonstrating a steadfast commitment to both responsible fiscal management and strategic investment in the community's future.

Despite facing multi-million-dollar increases mandated by the State of New Jersey in pension obligations and a significant uptick in healthcare costs, Hoboken continues to prioritize infrastructure upgrades, open space expansion, and quality of life improvements, while maintaining financial stability and an outstanding AA+ long-term credit rating.

“From major open space projects to water main upgrades and revitalizing our waterfront, this budget reflects our ongoing commitment to upgrade quality of life for Hoboken residents,” said Mayor Ravi S. Bhalla. “While fixed costs beyond the City's control, including multi-million-dollar State pension obligations and rising healthcare costs, continue to be a challenge, I am proud that our operations and discretionary spending continue to be well below the rate of inflation, reflecting our commitment to taxpayers.”

This year's budget allocates capital funds for several key projects aimed at enhancing the quality of life for Hoboken residents. Notable highlights include: ‍

Moreover, the 2024 budget underscores Hoboken's journey toward financial resilience. Approximately 15 years ago, the city grappled with financial mismanagement, leading to State takeover. Today, Hoboken has earned a AA+ bond rating from Standard & Poor’s Global Ratings due to the City’s prudent fiscal stewardship and dedication to sound financial practices. This year, S&P also increased the City’s short-term bond rating to SP-1+, the highest possible rating for a municipality. The outstanding credit ratings allow the City to bond at low interest rates, saving taxpayers significant costs on capital projects.

The proposed budget for 2024 is $144.3 million, a 5.9 percent tax rate increase from last year which equals approximately $14 per month for the average assessment. It reflects significant fixed cost increases including nearly $3 million in mandated State pension cost increases, a nearly $2 million increase in healthcare costs, and $750,000 contractual increase in trash collection.

While the multi-million-dollar fixed costs make up most of the budget increase, discretionary and operations spending remains below the rate of inflation to mitigate the impact on taxpayers. The City has reduced costs and decreased salaries and wages through a reorganization of City departments earlier this year. The reorganization has eliminated redundancies and streamlined operations throughout City Hall, which has included a 1 percent reduction in salaries year over year.

Since 2018, the inflation rate has increased 21 percent, while the City’s tax rate has increased 16 percent, 5 percent below the rate of inflation. The City of Hoboken continues to have the lowest tax rate of any municipality in Hudson County.

The Administration will host nine budget workshops via Zoom starting each day at 6 p.m., to provide an opportunity for open public engagement. Information on how to join the workshops will be issued via Nixle in the coming days. The workshop schedule is as follows:

• Monday, April 15
• Tuesday, April 16
• Monday, April 22 (UPDATED: Now Wednesday, April 24; See link above to Zoom.)