The Secaucus Town Council unanimously voted at its meeting on Tuesday to participate in a pension deferral plan approved last month by the state legislature to stave off local tax increases.
Under the plan, counties and municipalities, including Secaucus, can defer up to half of their public employee pension payments to the state for one year. The measure is designed to reduce the possibility of municipal and county property tax hikes during the recession, which many state leaders fear could trigger layoffs throughout New Jersey.
However, towns that defer payments will have to start repaying next year, with interest.
To take advantage of this opportunity, counties and municipalities are required to pass resolutions stating that pension deferral is necessary to maintain fiscal stability. The Town Council passed such a resolution last week.
Local governments will also need approval from the state Department of Community Affairs’ Local Finance Board. If approved by the board, Secaucus stands to save $934,212.50 in pension payments this year. This amount includes $666,801 in pension payments owed to the Police and Fire Retirement System, and another $267,411.50 due to the Public Employee Retirement System.
Employees will still get their money from the state, but New Jersey won’t be reimbursed by the town until next year.
“Our thinking is, we would like to take advantage of this [option] this year, and then when our ratables are booming again we can sock money away so that when this obligation comes due, we’ll have money to pay for it,” Drumeler explained last week.
About 70 percent of the town’s operating budget is paid for by industrial and commercial property taxes, while about 30 percent comes from residential property taxes, Drumeler said. Secaucus gets some additional revenue from state and federal grants, hotel room taxes, and the municipal court.
Controversial measure
Many local towns are considering taking advantage of the measure, including West New York, North Bergen, and Hoboken.
Although the deferral plan passed both houses of the New Jersey legislature, it is a controversial measure that was supported only by Democrats. State Republicans, all of whom voted against the plan, and a handful of Democrats argued that the public pension system is already underfunded; they believe the deferral plan will exacerbate the problem. In addition, they claim the pension deferrals won’t prevent tax increases, but will instead only delay them.
Corzine has responded that pension deferrals, though not an ideal tax relief solution, are necessary given the extraordinary fiscal crisis facing New Jersey and the country right now.
At Tuesday’s Town Council meeting, Councilman Gary Jeffas, a member of the Television Subcommittee, gave an update on the governing body’s plans to videotape and air its meetings. Local politicos have been divided over whether televised meetings will encourage more public participation, or just lead to grandstanding among residents who show up for the cameras.
Jeffas said the council has developed an RFQ (request for quotes) which will enable Secaucus to get payment rate quotes from professional videographers who are interested in taping council meetings for the town.
Before the RFQ can be released publicly, it must first be approved by the state Department of Community Affairs (DCA), a process which can take up to three weeks. Secaucus’ RFQ has been sent to the DCA for approval, Jeffas said. The town expects to hear from the DCA next month.
Once taping begins, likely sometime this year, the council has reached a compromise that only the official business of the governing body will be taped. The portion of the meeting set aside for public comments will not be taped. This compromise is a blow to open government advocates who had hoped to get council meetings taped and aired in their entirety.
At Tuesday’s meeting, the council also passed a resolution giving approval for a bus stop to be created at Meadowlands Parkway and American Way. There had been a bus stop along this stretch previously, but New Jersey Transit removed it, which led to complaints from residents and commuters who work in the area.
At the town’s urging, New Jersey Transit has agreed to put the stop back. There will be a public hearing and final vote on this resolution on May 12. – EAW
Reach E. Assata Wright at awright@hudsonreporter.com.