Entering the City Council caucus meeting with an entourage of officials Wednesday night, Mayor Glenn Cunningham personally introduced the 2002 fiscal year municipal budget to the nine-member City Council. The mayor anticipates spending $348.2 million to run the city from July 1, 2001 to June 30, 2002.
Cunningham said that fiscal responsibility was top priority in putting together this year’s budget. "[The administration will] keep spending down, restore the city to financial stability, and show the state that the city will not use unsound fiscal policies like the past administration," Cunningham said.
Cunningham has previously trumpeted his initial cuts in staff in the mayor’s office, citing $80,000 in savings. According to the budget, however, there is a $12,000 increase in salaries and wages within his office.
Cunningham spokesman Stan Eason said that this is because some of those workers will be transferred to other departments, but the state has to approve such a move first. When asked how this saves money as a whole, Eason said an evaluation can be done to determine whether their services are needed in those other departments.
The council concurrently introduced an ordinance Wednesday night to reorganize a few city departments to save money.
The budget as a whole is $15 million higher than last year’s anticipated spending amount. But in the end, last year’s forecast proved too low. After the outgoing Schundler administration voted on a $333 million budget, they ended up spending approximately $339.9 million. The new budget anticipates spending $8 million more than that.
The City Council voted Wednesday to formally introduce the spending plan. Now, the members can review it over the next month. The city has not yet scheduled a meeting for a final hearing and adoption of the budget. When they do, residents will get to speak out at that meeting, and then the council will vote. By law, the council must wait at least 28 days from Wednesday’s introduction for that final hearing.
Depends on aid
As a state-designated "distressed city," Jersey City receives a certain amount of extra state aid each year, but must have its budget approved by the state Department of Community Affairs.
According to Cunningham, the preliminary budget could fluctuate depending on how much "Distressed Cities aid" Jersey City receives from the state. The administration is currently seeking $16 million in Distressed Cities aid. It only received $4 million last year after it expected to receive $15 million. The gap caused a protracted battle and the looming threat of widespread layoffs.
After giving Democratic governor-elect James McGreevey the city’s support in last week’s gubernatorial race, getting the needed financial aid from the state might be easier than it was during the administration of former Gov. Christie Whitman. However, Cunningham acknowledged that the state expects to give out less aid as the economic slowdown continues.
The budget is partially funded by $102 million in local taxes the city hopes to collect. The rest of the money comes from federal grants, state aid, and other sources of revenue such as fees for licenses. The administration is also creating an Office of Grants Administration and Compliance that will consist of approximately five individuals actively seeking and writing grant proposals.
"We held the same tax rate," said William Ayala, chief of staff, last week. "But since there are more people paying taxes, we are collecting more money." The overall tax rate (which includes the city rate, the school tax rate and the county rate) is $45.48 per $1,000 of assessed property value. This means that a person who owns a home assessed at $200,000 will pay $9,096 in property taxes this year.
Among the other revenue sources the city has are payments-in-lieu-of taxes (PILOTS) for the upcoming fiscal year. These are property taxes that are paid by corporations and not subject to changes in the tax rate. The city hands out tax abatements as a means of luring new businesses to the area, although the practice is controversial. The city will take in $52 million in PILOTs this year.
Government consolidated
Among the cost-cutting measures taken by the administration is a consolidation of government departments, Ayala said. The council passed an ordinance Wednesday night that reorganizes the municipal government, allowing the administration to cut two departments and turn them into divisions of other departments. For instance, the Department of Economic Opportunity and the Department of Neighborhood Improvement have been diced off the list of departments. The Division of Economic Opportunity will now be under the Business Administrator’s office, and the Neighborhood Improvement Department has been divided amongst the Police Department and the Department of Housing, Economic Development and Commerce.
Another change to the organization included removing Cultural Affairs from the Department of Recreation and Cultural Affairs and moving it into the Department of Health and Human Services. Before voting in favor of the organizational changes in government that unanimously passed, Councilman William Gaughan commented that this change seemed inappropriate and out of touch with the purpose of Cultural Affairs.
In other council business
The council also passed a first-reading ordinance to make amendments to the Exchange Place Redevelopment Plan, allowing the Hyatt Hotel currently under construction to place a sign on the front of the building that exceeds the size allowed according to the former plan.
Downtown Councilman E. Junior Maldonado questioned whether other businesses would want to follow this trend and put their corporate logos on the faces of high rise office buildings as well, and eventually impede residential views.
"It’s been traditional to allow hotels to have more identification," Director of City Planning Bob Cotter said. Because the sign will face New York City and the hotel will stand directly on the waterfront, Cotter said the sign would not pose a threat to residential views.
Another first-reading ordinance unanimously passed made amendments to the Newport Redevelopment Plan that will allow an area in the northeast section of the development plan formerly designated for residential units only to now allow an opportunity for office buildings and commercial projects. Cotter said the Lefrak Organization, which owns and develops all Newport projects, asked for the amendment in the wake of the Sept. 11 attacks on the World Trade Center that have created a new demand for office space.