Hoboken Mayor Releases Preliminary Budget Angering Some Council Members

The Hoboken City Council will meet via a Zoom meeting on Wednesday night.  Today, before members of the City Council even saw a copy, Mayor Ravi Bhalla released the Fiscal Year 2021 budget through a community email blast.

The Mayor says the budget is balanced, cuts spending and increases taxes 1.4 percent.

Here’s a copy of the Mayor’s message:

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.

“Like the rest of the country, Hoboken’s economy and finances have not been immune from the coronavirus pandemic. In the face of unprecedented budget challenges compounded by COVID-19 and continuing uncertainty about the virus and the economy, we are putting forward a responsible, balanced budget that provides the services our community expects and continues to invest in our future,” said Mayor Ravi Bhalla. “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.”

While Hoboken overcomes the challenges of COVID-19, the city continues to move forward with major infrastructure and quality of life projects:

• 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

Nearly $20 Million Budget Impact

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.

Closing the Gap

Through a variety of cost-cutting measures and new revenues, the budget gap has been closed by approximately $10.9 million. 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% increase in the municipal purposes tax.

Impact on Taxpayers

Because municipal taxes are only 33% of the total tax bill (County taxes are 36%, Schools are 26%, Library is 3% and Open space is 2%) and because this year Hoboken’s share of County taxes are decreasing by 6%, the overall tax impact on property owners from the introduced budget would be an increase of 1.4%, which for the average assessed property in Hoboken of $522,000 corresponds to an annual increase of $115, or $9.50 per month.

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Council members Tiffanie Fisher and Michael DeFusco were very critical of the Mayor for releasing details of the spending plan before the Council had a chance to review the document ahead of Wednesday’s introduction.

Councilwoman Fisher tweeted, “Not a surprise for a Mayor who prefers headlines over transparency.”

Councilman DeFusco added in a tweet, “I’m seeing along with all of you – 9% municipal tax increase on top of borrowing $5 million to cover misspending, a maneuver that’s still questionably legal.”

The budget released today does show Hudson County offsetting Hoboken’s municipal tax hike with a decrease in County taxes for the city.