Jersey City taxpayers are emptying their wallets this year to fund Jersey City’s $423 million budget, which was passed in March and climbed from $391 million last year.
The budget was also passed eight months into the fiscal year.
While the tax increase (from $19.30 per $1,000 of property to $22.85) was the first one in Jersey City in about a decade, it was clear that past administrations had left a looming financial crisis.
It was also clear that Jersey City always passes its budgets late, giving the city little extra time to come up with crafty revenue deals.
How to avoid these problems in the future?
Mayor Jerramiah Healy has in recent weeks called for a freeze in city employee promotions and salaries, asked county officials to cut their budget (see story, left) and met with state assembly officials to discuss legislation for new revenue sources.
On Thursday, he convened the first meeting in the Mayor’s Office of his new Economic Advisory Council. The council is expected to help Healy find new revenue sources and will report to him directly.
Jersey City property owners faced both an 18 percent municipal tax increase and are looking at a possible county tax increase. Then there is the third part of the formula, the school budget, which will suffer from a large decrease in state aid due to the state’s budget crisis.Revenue deals for the city
Mayor Healy met on May 12 at City Hall with state Assembly members including Brian Stack, Joan Quigley, and Vincent Prieto, State Senator Joseph Doria, and Hudson County Executive Tom DeGise.
That meeting was for Healy to discuss introducing legislation on a state level that would bring in more revenues for the city, and to restore as much of the $7.5 million in state aid that was cut to the city.
The current year’s city budget had a $50 million hole to fill.
One of Healy’s first suggestions was legislation for cities of the “first class” – as Healy referred to Jersey City and Newark – to add $1 to the realty transfer fee to be charged during the sale of a property. In New Jersey, the fee is $5 per $1,000 of property value. Healy said based on information he received, $60 million was generated in Hudson County from the fee, with it all going to the state and Jersey City receiving no money.
“I view it as a kind of harmless or painless tax imposition when someone is selling their house, and that’s something that can generate billions of dollars,” said Healy on Thursday during the meeting at City Hall.
The next suggestion for legislation was for Jersey City to receive a share of the state hotel tax that is imposed upon each guest staying in a Jersey City hotel. Healy said none of the money goes to Jersey City. He said this results in millions of dollars for the state.
Healy also is working with State Assemblyman Louis Manzo regarding Manzo’s legislation to collect more money on vacant properties in the city, as well as force owners to start developing unused properties, so they could appear on the tax rolls. Economic Council
The new Mayor’s Council of Economic Advisors is a group of six people whom Mayor Healy will consult in the next three years on how to further develop Jersey City’s economy.
The council was established by Healy on Feb. 10 by executive order, and the first meeting was Thursday.
The council consists of four members of the business community, as well as one academic and one member of organized labor.
Business is represented by Rosemary McFadden, former managing director of Credit Suisse First Boston and a former Seton Hall Law School classmate of Healy, as well as John McCormac, former New Jersey state treasurer, and Anthony Cammarata, Jr., managing director for Goldman Sachs at their Jersey City headquarters at 30 Hudson St. Also representing the business community is Eric Silverman, who is the developer of the Majestic Theater Redevelopment Project on Grove and Montgomery streets and of the upcoming redevelopment of the old St. Francis Hospital.
Academia is represented by Henry Coleman, a professor of public policy at Rutgers University.
Organized labor is represented by Eric Boyce, Secretary/Treasurer for Hudson County Building Trades.
The executive order lays out the following responsibilities for the council: examine the finances and fiscal budget of Jersey City; evaluate the city’s property tax structure; identify opportunities for job creation for city residents; assess Jersey City in comparison with neighboring cities in terms of attracting jobs and businesses; develop a proposal for the city’s long-term economic growth, and discuss economic policies promoting job creation and growth.
Attending the meeting with Healy were City Corporation counsel Bill Matsikoudis, Assistant Business Administrator Gregory Corrado, and other officials.
Healy mentioned during the meeting that one of the major entities he wants to collect more revenues from is the Port Authority.
He said in comparison to Newark – which receives about $60 million a year for the use of Newark city land for Newark Airport – Jersey City receives $750,000 a year in PILOTs (payments in lieu of taxes).
“We have the PATH Train, Holland Tunnel; Port Authority owns a lot of property in Journal Square…their assessed value of their holdings, which means just about one-third of their value, is $200 million,” he said. “But that was done 20 years ago.”
When McFadden asked when Jersey City undergone a property tax revaluation, the response from Healy and other city officials was that it was at least 20 years ago.
Revaluation refers to the process for periodically determining the fair market value of real property. Hiring freeze
The city is also pursuing a hiring freeze policy. Recently, Healy explained that he had a meeting in April with the state’s Local Finance Board to restructure the city’s debt, and already discussed implementing a hiring freeze. The city is looking to cut excess spending to make it easier to start putting a municipal budget together for the next fiscal year.
“We are only going to replace those people who are necessary,” Healy said. “Usually we are talking about police, firemen, and certain very vital positions in the city.” Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com