Tax Relief comes for taxpayers but limits set by State control

Tomorrow night’s City Council meeting will feature the introduction of the budget from the Zimmer Administration and with it much needed tax relief.  The relief will come in the form of a 5% reduction amounting to approximately $2 million of the almost $12 million in the City’s current surplus plus another million in other reductions.

According to Councilman Mike Lenz, fourth ward Councilman and candidate for this November’s special election in the same ward, Hoboken can’t legally extend tax relief beyond this amount coming off fiscal monitor control. Although not physically present any longer in Hoboken, the State’s sign off releasing Hoboken is not expected to become official until September.  “The mayor, finance committee and the council are committed to giving taxpayers a five percent tax cut.  To cut any more in this six-month transition period would require state approval, and until we’ve had our fiscal house in order for some time, it’s very unlikely we could get such approval,” he said yesterday.

Councilman Lenz indicated there are additional state regulations preventing larger tax cuts when cities incur savings moving from a fiscal to a calendar year as Hoboken did with in a recent action by the City Council.  Combined together, Hoboken can’t in the short term deliver additional tax relief.

Councilwoman Beth Mason has issued several email communications to residents first insisting the $20 million “surplus” be given back to Hoboken taxpayers, then retreating a bit from that position before again issuing yet another email claiming a full $20 million surplus and suggesting people go to tomorrow’s meeting and “Tell City Hall to give your money back and cut your taxes immediately.”  

Most observers agree there’s been another $6 million added to the budget surplus this year but $8 million is restricted leaving the real surplus at $12 million.  The surplus has become a matter of strong contentious political disagreement not just its actual amount, but its revelation with announced citywide layoffs expected to become official September 24th.

The Hoboken PBA and its members have pointed to the “$20 million surplus” as a reason not to overhaul the police department.  Councilman Lenz did not view the two issues as linked stating reserves in the city were a necessity, “The introduced budget does use some of the surplus of the surplus to reduce taxes, but it maintain $10 million as working capital and as a cushion against financial shocks.  This is toward the high end of the accepted 5-10% range for well run municipalities and will speed us toward a better bond rating.  Given our history and exposure this is just what we should be doing,” he said.  

Hoboken’s current bond rating is said to be just above junk status meaning the cost to the city for borrowing money when needed comes at significant high cost. 

Looking ahead, Councilman Lenz acknowledged expectation from Hoboken taxpayers saying, “The Zimmer Administration is getting Hoboken’s finances under control, and making the tough choices to reduce spending.  Taxes will go down 5% in this budget, and more in the next if we stay the course.  Mayor Dawn Zimmer and her council allies – all of which I am proudly one – are committed to doing just that.”

Critics of the Zimmer Administration led by die hard backers of Councilwoman Beth Mason’s failed mayoral run last year have complained there was no real intent to cut spending or reduce taxes.  Most independent analysts acknowledge there can be no significant tax relief without reductions in city personnel.  City manpower costs are upwards of 70% of the city’s annual budget with public safety alone coming in over 50%.  

Councilman Lenz acknowledged the current built in cost to the city and necessity for more tax relief concluding, “the only way we can do so as a city is to control spending.”

Tomorrow’s City Council meeting can be expected to exhibit sharp disagreements on all the steps proposed by the Zimmer Administration on the matters of taxes, the budget and municipal layoffs.  Onlookers will be curious as to the possible linkage between them as political consultant Paul Swibinski is now employed by Councilwoman Beth Mason and the Hoboken PBA.  Word of a show of force from the Hoboken Police is expected.

Talking Ed Note: If you want a good seat for tomorrow’s City Council meeing get there early.  Unlike the previous City Council meeting, if you are tossed for bad behavior you won’t be able to go sit in the corner.  There will be police available to show you the door.

MSV plans to attend and provide onsite observations and pictures for the Hoboken Journal.  You can watch the meeting online and join in the discussion there:

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