Today the City of Hoboken has announced that it will be laying off 26 members of its workforce.
“Like many other municipalities, states, and organizations across the United States, COVID-19 has had a major impact on the City of Hoboken and its finances. The City has taken on additional new costs to protect the health and safety of residents, while also realizing substantial losses in revenue due to the crisis,” said Hoboken Mayor Ravi Bhalla. “The negative budgetary issues from COVID-19 and an additional anticipated loss of revenue in the weeks and months to come, compounds an already difficult budget for this year that I’ve communicated about previously.”
Of course Hoboken’s fiscal problems were no secret coming into the current COVID-19 crisis. In early February, details about the scale and impact of budgetary shortfalls were coming into focus, as a nearly $7.5 million increase in expenditures was being met by a projected decrease in the municipal surplus regeneration for 2019 said to be as high as $6.5 million. When added together, those numbers represented quite a hole for Hoboken to fill as they prepare to work on the 2020 budget.
On March 4, scores of municipal employees descended upon that evening’s City Council meeting to deliver passionate protests regarding the pending layoffs. At the time, 79 City of Hoboken employees had been given notice that, “for reasons of economy, efficiency or other related reason, it is possible that you will be laid off or demoted from your permanent or probationary positions.”
As the monumental COVID-19 response effort essentially pushed all other City business to the back burner, questions still remained regarding the status of Hoboken municipal employees. With the layoff date just weeks away, Hoboken City Council passed a resolution at the April 15 meeting urging the administration to suspend all pending layoffs and publicly present a comprehensive outline of the municipal budget.
“Over the past three months, members of the City Council have repeatedly asked the administration to share with us a comprehensive outline of Hoboken’s finances, a request that has still gone unanswered,” said Hoboken First Ward Councilman Mike DeFusco. “Having still not seen as much as a budget proposal, even as neighboring cities have introduced their budgets, it would be irresponsible for the city to lay off any employees until we have time to properly review the numbers, line by line. The additional COVID-19 related expenses will undoubtedly put an additional strain on City resources and we will continue to dedicate all of our resources to stopping the spread of this virus. However, it’s critical for us to ensure the city’s necessary response to this emergency is not used to cover up the preexisting deficit. We must begin having open and honest conversations about our budget to protect the long term financial integrity of our city and municipal employees.”
The city has also taken on previously unanticipated costs for its emergency response to the global health crisis and municipal service revenues are expected to sharply decrease as a result of social distancing measures put in place. All of this, understandably, will add to the budget deficit.
“Transparency is important in this process,” Hoboken Second Ward Councilwoman Tiffanie Fisher told hMAG immediately following that vote. “It would be a shame if we missed an opportunity to avoid these layoffs. Right now we just don’t know.”
Neighboring Jersey City, facing an anticipated $70 million shortfall due to COVID-19, has offered voluntary buyouts to 400 municipal employees.
“We’re hemorrhaging money,” said Jersey City Mayor Steven M. Fulop recently told NJSpotlight. “Every year we have a lot of employees, like every municipal government, that are kind of on the fence about whether they should retire or not, and we think that this structure might help them make that decision and ultimately save us money long-term.”
The Hoboken Administration maintains that it has been working to address previous budgetary challenges, but the pandemic and the already-shaky fiscal standing makes the situation unmanagable without layoffs in City Hall.
“As a result, we had to make the unavoidable decision to submit a plan to lay off 26 positions, which makes up approximately 4% of the total workforce,” said Bhalla. “I hold a responsibility to the taxpayers of Hoboken to do everything possible to mitigate a large tax increase due to these factors and must act on that obligation. I recognize the impact this decision will have on some of our employees and their families, and we will do everything possible to assist them with their next steps. During these challenging times, unfortunately, difficult decisions have to be made to protect the long term fiscal health of our City.”
UPDATE: A City representative has asked us to clarify that the previous list of 79 potential layoffs has been amended. While 26 employees will be laid off, the remaining employees are no longer on a layoff list.