Residents who recently received their Union City tax bill have noticed what many towns in the state are noticing – taxes are rising, partly due to an increase in energy costs, a decrease in state aid, and overall economic challenges.
In Union City, the property tax rate paid to the city, county, and schools combined is rising 7 percent this year.
The city’s current fiscal year budget, which runs from July 1, 2008 through June 30 of next year, is expected to be introduced in approximately two weeks, and to rise to $97 million this year from approximately $93.8 million last year.
“This is like the perfect storm anyone could go through right now,” said Union City Mayor Brian Stack last week, “because you got the economy that’s upside down, you got the state cutting back on everything, and you got municipal taxes going up.”
Residents agreed that times are getting tougher.
“Between [higher taxes] and the higher energy costs, it is going to be really hard,” said Tom Regan, a lifelong Union City resident who was unhappy with his tax bill.
The new overall tax rate will be approximately $54.74 per $1,000 of property, up from last year’s, which was $51.07 per $1,000. That rate includes city, school, and county taxes. The Union City budget only affects the city portion. The other two entities pass their budgets in the spring.
The tax levy, or the actual amount of the city budget that will have to come from local taxpayers, is rising by $7.1 million this year. That means that because state aid is down and costs are climbing, residents will have to kick in $7.1 million more. When that number is divided by the value of the taxpaying properties, one arrives at the tax rate paid per $1,000 of property.
Stack estimated that the owner of $200,000 worth of property will pay $180 more in taxes this quarter than the same time last year.
What contributed Stack said that the tax increase is due to cuts in state aid, which total $1.8 million, as well as city employee healthcare and pension costs.
Most towns in Hudson County have had to deal with high tax increases this year for the same reasons as Union City.
Stack said that the state has cut back on municipal aid in order to decrease state taxes and to encourage regionalization among small towns that are close together.
Stack said that this year’s budget will rise because of “the increases in [the amount paid to the regional fire department], the increases in pension, and any [aid] cuts that we get.”
After the city budget is introduced by a vote of the Board of Commissioners this month, the draft will be presented to the state, a measure that is required of all distressed communities. The state will need time to review the budget and approve it. After that, the Board of Commissioners holds a public hearing at which people can speak out about it. Commissioners also can recommend changes.
The city can amend the budget and take a final vote for approval. The entire process sometimes lingers into the next calendar year.
No hidden fat To explain the increase, Stack recently wrote a letter to all taxpayers in Union City describing the rising costs and cuts.
“I did this for the sole purpose of showing people that there is no hidden fat in the budget,” he said last week.
Stack said that the city has fewer full-time employees than in the past, but health insurance costs and other benefits are increasing. He added that three out of the five city department payrolls cost less today than seven years ago.
“We trimmed a lot,” he said. “I can’t go any lower than what I’m going.”
He added, “We are trying not to replace anyone; only essential employees, police officers.” Stack also said that fire protection is also a big cost driver this year.
“We are a distressed community [according to state financial guidelines] on one hand; on the other hand, we are paying the biggest chunk of the fire department,” he said. “We basically pay a third.”
He said that the Regional Efficiency Aid Program benefits from the state that were promised as a result of regionalizing the local fire departments in 1999 have now been reduced.
“That was supposed to be an incentive to the taxpayer that the regional fire department was going to be a savings overall, and that this would be basically a savings and a sweetener immediately to give people property tax relief,” said Stack.
He added that this REAP funding was not supposed to be cut, and that cuts were not in the original legislation. He said he and other local mayors are fighting to have that funding restored. Stack said that development in Union City has helped to decrease taxes. If more people are contributing to the tax levy, that means each one gets to pay a little less.
“It’s been a help,” he said. “We’ve put a lot of ratables on the books, but there is only so much development you can really have in Union City. It’s very densely populated. There’s not many open pieces of land here to develop.”
He also said that many parks and other public projects have been funded by grants, not taxpayer money.
“I want to get the cost under control here,” he said.
Where to cut As far as the budget cuts mentioned in the letter, Stack said that he and the commissioners are looking at everything.
“We’re looking at everything right now,” he said. “We’re looking across the board at everything we can. There’s not a lot of fat in the budget.”
Are you struggling with bills? Stack said that he knows some Union City residents are struggling through the tough economic time.
Stack followed up with a subsequent letter saying he can help residents with some of their financial issues. Town officials are now offering assistance to residents facing foreclosure or a PSE&G shutoff or those who are having trouble buying essentials.
A state program exists to help low-income residents pay heating costs they can not afford. In his letter, Stack wrote, “In fact, during the past eight years as your mayor, the economic situation has never been this difficult.”
“Even if you are a tenant, you know your rent is going to go up,” said Regan. Comments on this story can be sent to firstname.lastname@example.org.