City Councilmembers Respond to Bhalla Administration’s Hoboken Budget Proposal
On Monday morning, the Bhalla Administration announced that they were prepared to present their long-anticipated budget for Fiscal Year 2020. Later that afternoon, the specific details of the tentative $118 million budget were disclosed and disseminated to Councilmembers and the media.
Factors weighing heavily in the budget decision process include a pre-existing budget shortfall, a reduction in surplus regeneration, and the unprecedented loss of revenue due to COVID-19—the combination of which represents an estimated $19.8 million impact.
According to the Administration, a combination of “new revenues” and cost-cutting measures have reportedly bridged the budget gap by approximately $10.9 million. In April, over two-dozen Hoboken municipal employees were either laid off or were offered early retirements as part of those cost-cutting measures.The current budget proposal calls for using $3.3 million of the city’s non-regenerating budget surplus, leaving a $5.5 million gap—which would be closed by a 9.8% increase in the municipal purposes tax. Municipal taxes make up roughly 1/3 of the overall tax bill for Hoboken property owners. With Hoboken’s share of County taxes decreasing by 6% this year, the proposed budget would in turn translate to an increase of 1.4%. According to the Administration, for the average property in Hoboken—assessed at $522,000—that corresponds to an annual increase of $115, or $9.50 per month.*
(*Updated to reflect that the numbers stated above have been provided and interpreted by members of the Bhalla Adminstration, not hMAG.)
“Over the past six months, my Council colleagues and I have repeatedly asked the mayor to present us with a budget to begin an open and transparent dialogue about the state of our city’s finances,” said First Ward Councilman Mike DeFusco, in a statement issued Monday afternoon. “The administration is now attempting to hide behind the fact the mayor wants to raise municipal taxes by nearly 10%, on top of borrowing $5 million at the expense of taxpayers, while our County tax burden decreases. Hoboken’s long existing budget woes are a direct result of a pattern of gross misspending, awarding politically connected contracts and giving out patronage jobs that we are now facing the consequences of. It is nothing shy of irresponsible for Mayor Bhalla to continue using a global health crisis as an excuse for years of poor financial planning, even after recovering $1.4 million in federal aid. Giving the Council 48 hours to review the proposal before asking us to adopt it is the very gimmicky budget the Mayor swore he’d never introduce and Hoboken taxpayers deserve better than this.”
Bhalla ally and Fifth Ward Councilman Phil Cohen says, “As a member of the Council’s Budget and Finance Committee, I appreciate Mayor Bhalla’s Administration coming forward with a responsible, balanced budget in the face of COVID-19’s extraordinary challenges to our municipal operations that both reduced Hoboken’s revenues and increased Hoboken’s expenses.”
Prior to the COVID crisis, the City of Hoboken was facing an estimated $7.4 million budget shortfall, compounded by a $6.4 million reduction in its surplus. As the pandemic has taken hold, the resulting economic fallout is estimated to add another $5.9 million in both added costs and lost revenue.
“From my perspective on the Budget and Finance Committee, an extraordinary amount of work went into this budget, narrowing our budget gap by more than $14.7 million through serious belt-tightening, reduced expenditures, and major efforts to protect the taxpayer, which translates to an overall 1.4% tax increase in an extraordinary fiscal year,” said Cohen. “I look forward to collaborating with my Council colleagues on finalizing the City’s budget for approval later this Summer.”
Fourth Ward Councilman Ruben Ramos is slightly more critical of the proposal.
“First we should be thanking our surrounding municipalities for growing their ratable bases over the past few years. This budget shows Hoboken is a direct beneficiary from how other towns have developed themselves with our county tax rate being significantly reduced. This budget also shows how we need to responsibly grow our ratable base,” said Ramos.
“Once again this budget shows how Hoboken can no longer continue to rely on one-time revenue usage such as parking utility, surplus and now potential bonding scheme—it’s simply not sustainable,” said Ramos. “I’m looking forward to working with my colleagues to adopt a responsible budget that meets all of our current and future community needs with the goal of avoiding kicking the can down the road that can negatively impact future budgets.”
Councilperson-at-Large Emily Jabbour sees the budget proposal as, “both responsible and reasonable during an otherwise very difficult year.”
Jabbour notes, “The proposed 1.4% increase comes at a time when Hoboken has continued to lead the country with respect to safe quality of life solutions—whether providing residents with free COVID testing or supporting local businesses through creative outdoor options to allow for reopening.” Regarding the delays in the presentation of the budget, which had been initially anticipated in May, she says, “The budget landscape has changed on an almost daily basis and I’m especially grateful to Director Landfolfi, Director Freeman, and Chris Baldwin for their hard work and time spent with the Finance Subcommittee over the last several months to share these updates. While other cities are seeing massive tax increases due to COVID—such as NYC facing a shortfall in the billions—Hoboken is fortunate this year to have a budget with less than a $10 per month increase, which is great news for taxpayers during this pandemic.”
Fellow Councilman-at-Large James Doyle echoes the sentiments of perennial allies Jabbour and Cohen, stating, “I am very happy that, in these very difficult financial times, the City has been able, through a confluence of events, to arrive at a budget with a very modest overall increase in the tax burden on our residents in the face of these challenges. I commend the administration and those on the Council who worked together to arrive at this point.”
Second Ward Councilwoman Tiffanie Fisher was significantly less satisfied with the process and the current result.
“Because financial acumen, transparency and leadership are areas of weakness of this administration, the City Council has been focused from the start on seeing the detailed budget (which it just received yesterday). To date, what we have seen few cost-cutting measures, an overstatement of the negative impact of COVID, reliance on surplus and one time revenue sources and kicking 2020 costs into 2021.” Fisher said, “I am hoping that the Council will be able to find improvements to the Mayor’s budget and proposed an almost 10% tax increase (which equates to approximately $250 to the average taxpayer), to deliver the best possible outcome for Hoboken residents in a year when many are suffering financially. I look forward to reviewing the budget in detail and working with my Council colleagues and the administration to deliver a fiscally responsible FY2020 Budget.”
“By the way,” adds Fisher, “the Mayor should be buying the County flowers, given its significant rate reduction allows a 9.8% municipal rate increase to look much lower overall at 1.4%.”
Councilmembers Falco, Giattino and Russo were approached for comment but did not respond.
Hoboken’s next scheduled City Council Meeting is Wednesday, July 8 at 7:00 p.m.