Hoboken Proposes $118M Budget For 2020

HOBOKEN, NJ — Hoboken Mayor Ravi Bhalla's office sent a release Monday saying it has finalized the long awaited 2020 city budget, after the layoffs of city workers and much fretting over ballooning costs. The proposed $118 million spending plan means that the owner of an average assessed property in Hoboken of $522,000 will pay an annual tax increase of $115.

The amount would have been larger, but is partly offset by a decreased city contribution to the county budget, the city said. The new proposed budget uses $3.3 million in surplus and increases the tax levy by $5.5 million in order to close a gap.

In spring, the city laid off more than two dozen workers. Members of the City Council, some of whom are at odds with Bhalla politically, also voted to disband the Office of Constituent Affairs, saying the functions could be absorbed by the mayor's office.

Bhalla said on April 17 that he would lay the employees off to avoid a tax increase. He cited rising costs due to the coronavirus pandemic, but had said early in the year that the city was already struggling with cost increases.

All cities have been forced to account from lost revenue from municipal courts (tickets), parking fees, and other income sources.

A release sent out by the city on Monday said, "The Bhalla administration today is introducing a municipal budget that overcomes unprecedented budget challenges due to the COVID-19 pandemic including significant revenue shortfalls with a balanced budget that maintains community services. The budget includes a $5.5 million increase in the municipal purposes tax for an overall tax increase of approximately 1.4 percent."

Last year's proposed budget was adopted at $118.2 million, including a proposed $56 million tax levy.

Bhalla said, “Like the rest of the country, Hoboken’s economy and finances have not been immune from the coronavirus pandemic ... we are putting forward a responsible, balanced budget that provides the services our community expects and continues to invest in our future. Through a combination of difficult cuts and new revenue sources, we have chipped away at a nearly $20 million budget shortfall and are introducing a budget that would result in an overall property tax increase of just over 1 percent. I look forward to working collaboratively with the City Council in the weeks ahead as they consider and ultimately adopt a budget.”

Second Ward Councilwoman Tiffanie Fisher responded later on Monday, "The mayor should be buying the county flowers given its significant rate reduction allows a 9.8 percent municipal rate increase to look much lower overall."

She said, “Financial acumen, transparency and leadership is a weakness of this administration which is why the City Council has been focused from the start on seeing the budget (which was sent to the council for the first time after the press statement was sent). We are hoping that in a year where many are suffering financially that the mayor’s budget reflects the best possible outcome for Hoboken residents. To date, what we have seen has shown few cost cutting measures, an overstatement of the impact of covid, reliance on surplus and one-time revenue sources, and kicking 2020 costs into 2021. I look forward to reviewing the budget in detail and working with my colleagues and the administration to deliver a fiscally responsible FY2020 budget."

Bhalla's office said in the release, "Entering the fiscal year, increased costs and revenue losses created an estimated $7.4 million budget shortfall, compounded by a $6.4 million reduction in regenerating surplus and $5.9 million in added costs and lost revenue due to COVID-19 for a total budget impact of approximately $19.8 million.

"Through a variety of cost-cutting measures and new revenues, the budget gap has been closed by approximately $10.9 million, said the city. In addition, the introduced budget proposes using $3.3 million of the city’s rainy day fund (non-regenerating budget surplus). The remaining $5.5 million gap would be closed by a 9.8 percent increase in the municipal purposes tax."

Impact on taxpayers

Taxpayers in New Jersey must pay quarterly taxes based on the assessed value of their property. Their total tax is made up partly of the municipal budget, but also comes from the school budget, county budget, and a small open space amount.

Thus, the city budget increases may be offset by decreases in other budgets.

The city said, "Because municipal taxes are only 33 percent of the total tax bill (County taxes are 36 percent, schools are 26 percent, library is 3 percent, and open space is 2 percent) and because this year Hoboken’s share of county taxes are decreasing by 6 percent, the overall tax impact on property owners from the introduced budget would be an increase of 1.4 percent , which for the average assessed property in Hoboken of $522,000 corresponds to an annual increase of $115."

The city noted some accomplishments:

• Repaving over 40 blocks of streets and restriping crosswalks and bike facilities city-wide
• Eliminating the line at the Parking Utility through online permits and by launching an appointments-based program
• Working with NJ TRANSIT to reduce crowding on the 126 Clinton St and Willow Ave routes through articulated buses and additional bus stops
• Ongoing construction of the new 5-acre Northwest Resiliency Park, improving the Maxwell Park dog runs, upgrading the Elysian Park playground safety surface Elysian Park, and upgrading the spray area at Stevens Park
• Supporting our businesses by creating 12 streateries, 21 parklets, and over 150 expanded sidewalk cafes
• Completing the replacement of over 7,000 feet of antiquated water mains to reduce water main breaks
• Upgrading the South Waterfront Walkway with new pavers, 41 new trees, 200 native plants, and upgraded LED lighting.

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