Dear Editor:
Property taxes in Hoboken are unconscionably high. This calamity evolved over sixteen years of government ineptitude, malfeasance, gimmickry, favoritism and bloat.
There is no simple solution. Property taxes are a complexity of many moving parts like a watch and so many parts have been broken for so long it may be impossible to repair. It may require a new watch.
Property taxes in Hoboken are comprised of three elements.
The Municipal Portion, expenditures from City Hall, amounts to between $90 and $100 million. The Mayor and City Council are responsible for the Municipal Budget though now a State appointed Fiscal Monitor is in charge of Hoboken’s municipal finances.
The Board of Education budget is around $60 million. The budget is prepared by the Superintendent, endorsed by the BOE, and then put to the voters for approval.
The County budget is well over $300 million. It is prepared by the County Executive and approved by Freeholders. Hudson County’s twelve municipalities each provide a share of the County’s revenue.
These three elements are developed separately then combined to strike Hoboken’s property tax.
Some of the property tax complications are:
Many one time “fixes” such as sale of city property have been used as one time/ one year revenue sources, deferring the pain of property tax increases.
Bonds have been inappropriately sold to fund operations stretching one year’s cost over many years of repayment.
Municipalities grant PILOTs (Payment In Lieu of Taxes) to developers for new projects effectively exempting them from paying BOE and County taxes. Jersey City’s abuse of PILOTs has meant that Hoboken pays a disproportionate share of County taxes.
Annual increases in the County’s budget (and taxes) are capped by the State but the inevitable increases are simply passed on to the municipalities, 5 percent this year.
The BOE budget grows under-the-radar since new taxable properties are added to the tax rolls every year even if the tax rate is held steady.
Property owners have a right to appeal their assessments. When appeals are won and assessments are reduced, the lost taxes are passed on to the rest of Hoboken taxpayers.
There has not been a Revaluation since 1988, despite a legal mandate which has been ignored. There will be winners and losers when the Reval is completed.
The City guaranteed over $50 million in hospital bonds. If the hospital’s financial situation weakens the City will have to subsidize the hospital’s operations and/or set up a reserve for servicing the bonds.
Unfortunately there is no simple solution to rectify years of sloppy governmental financial management; however here are a few places to start:
Get the Hoboken municipal budget down below $90 million without any gimmicks.
Change State law so municipalities cannot game PILOTs to pass their share of County taxes on to other municipalities.
Regardless of new ratables, freeze the BOE budget at the ‘09 level and for next year prepare a zero-based, performance based budget.
“Watch-dog” the County budget, demand reductions, and make sure that taxes are fairly applied to each municipality. Do we really need County government?
Complete the Reval as required by law.
Develop a plan to stabilize the hospital’s finances.
Let’s get started!
Jonathan M. Metsch. Dr.P.H.
(The opinions expressed in this letter are those of Dr. Metsch and not of any organization with which he is associated.)