When Gov. Jon Corzine announced two weeks ago that the state would trim $20.7 million from the aid it gives to cities across New Jersey, amounting to almost 5 percent of total aid given out, Sen. and North Bergen Mayor Nicholas Sacco believed that many towns would suffer a hardship.
However, in some places, the cuts are minor.
Town Administrator Christopher Pianese said last week that North Bergen will have to cut only $40,000 from its nearly $77 million budget.
Sacco still said the cuts are unfair.
“We know we are in dire straits in New Jersey now, but is it really right to give someone a budget figure that they are working with and then cut that figure?” asked Sacco.
“It’s the hundreds of thousands that could be cut that concerns us.” – Christopher Pianese
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With a $1 billion state deficit and Governor-Elect Christopher Christie set to take office in January, Sacco and Pianese also worry that more state aid will be taken back.
“It’s the hundreds of thousands that could be cut that concerns us,” said Pianese.
‘Groundbreaking’
Pianese said that normally, a town finalizes its budget once state aid figures are known. Figures could be cut before the budget is finalized, but never before has aid been taken back after the state already had approved municipalities’ budgets and aid packages.
“Its groundbreaking stuff,” said Pianese. “We are obviously nervous as to what can happen in the future.”
Pianese said that the township plans to cut back on overtime to make up for the lost funds.
Sacco said he is worried about the state of the economy and how it may affect similar aid cuts from happening.
“If the economy doesn’t improve, money is not coming in,” said Sacco. “If money doesn’t come in, the housing market is bad. [Less] sales [and less] sales tax [income to the state] and the season is light. That means there is less money for New Jersey and the deficit keeps growing.”
Debt to blame
Pianese complained that towns that are part of a state bonding program did not have to lose money, while a town like North Bergen did.
He explained that when a town issues a bond for debt, if they receive state aid, they can enter into the state’s “qualified bond program.” By doing so, any state aid that they receive is listed as revenue in their budget, but actually goes directly to paying off debt service.
Pianese said that some towns that were in this program did not have their aid cut, because all of their aid goes to paying off their debt. Yet with towns like North Bergen that pay off their own debt privately, their funds were slashed.
“If you are going to cut 1 percent across the board for every municipality, fine, we’ll all deal with it and take our lumps, but how can you go and take money from North Bergen and not from somebody else just because there is nothing to take, no tangible way to take it,” said Pianese.
He said that Sacco plans to bring the issue to the Senate.
“It started many years ago and it’s the fault of both parties,” said Sacco. “The reliance of borrowing, borrowing form the pension plan, keeping the budgets manageable and borrowing money ends up paying of so much debt service that there are automatic problems.”
Tricia Tirella may be reached at TriciaT@hudsonreporter.com.