As Democrats in Trenton scramble for ways to restore millions of dollars in cuts recently made to the state budget by Gov. Christopher Christie, municipalities – including Jersey City – are still trying to decipher what the approved budget will mean for them.
Since most of the budget line items that were vetoed by the governor impact programs that benefit the poor and working class, Democrats and others have argued that the cuts will most hurt urban areas where there are higher concentrations of these populations.
The $29.7 billion budget signed by the Republican governor cut some $900 million in spending the Democrats had hoped to salvage for various social programs. Among the programs that will lose funding under the budget include municipal public safety grants, education grants, Urban Enterprise Zones, tax relief programs for the elderly, nursing homes, legal aid programs for the poor, and Medicaid.
“We will do everything possible to not raise taxes.” – Jennifer Morrill
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“Clearly, the cities bear the brunt of the line item vetoes. The exact impact is still being analyzed,” said city spokesperson Jennifer Morrill. “Cuts were made to higher education, to the working poor, to the ill, to seniors, to children. It appears that the most vulnerable residents of our city will face a disproportionate impact as a result of the Governor’s decision.”
Impact on public safety
Last week, the administration of Mayor Jerramiah T. Healy was still analyzing the state budget and what impact it will have locally on city services and programs. Morrill said the city wants to avoid a tax increase, but that could mean finding alternative revenue sources or laying off staff.
“We do not have an exact figure [on how much money the city stands to lose under the approved budget], as that is still being analyzed,” said Morrill. “But we know the impact would be several million dollars in direct aid, not to mention indirect services provided through other entities that our residents would no longer be the beneficiaries of. For example, it was our understanding that we would have been eligible for part of the $50 million for police and fire salaries for urban municipalities that was entirely removed from the budget.”
Now that this money isn’t available, the city will need to look for resources elsewhere, make cuts in the municipal budget to pay for these salaries, try to get concessions from the unions, institute layoffs, or do some combination of the above, said Morrill.
Consolidating redundant services is another option the city could explore. City Councilman Steven Fulop has recommended having a single public safety director for both the police and fire departments who would have budget oversight for both agencies. This consolidation, if approved by the full council, would not impact the current chain of command of the individual department chiefs, according to Fulop.
Earlier this year, 84 jobs were saved in the Jersey City Police Department after the administration negotiated a deal with the police union that delayed some wage increases.
In April, Healy promoted five battalion chiefs to the rank of deputy chief to fill several vacancies created in 2010 due to several retirements. The mayor said this was a cost-saving measure that saves taxpayers $200,000 since, under the fire union contract, battalion chiefs who serve as deputy chiefs in an acting capacity earn the highest allowable wage.
The five who were promoted agreed to delay their salary increased for one year. But money for their increases will need to be found next year at a time when the city won’t get any help from the state.
“If we get no state assistance, the city will have to consider additional layoffs, furloughs, and consolidations,” Morrill said. “We will do everything possible to not raise taxes, as we did with the [CY2011] municipal budget, which is currently before the City Council.”
Loss of UEZ Program
The city is also cautiously eyeing what the budget could mean for the future of the Urban Enterprise Zone (UEZ) Program.
Launched in 1983, the UEZ Program was started to stimulate the local economies of the state’s once-blighted urban areas. Businesses located in a designated Urban Enterprise could charge a sales tax that is half of the usual state sales tax (currently 3.5 percent). A portion of this tax money is then returned to the city for local economic development, including capital improvements and salaries for public safety workers.
According to Roberta Farber, Jersey City’s UEZ director, through loans, grants, and other resources, the city has used its UEZ money to attract small businesses, help small businesses get started, assist businesses make improvements, and train residents for jobs.
Farber said the Women Rising Program – the city’s hospitality industry training program – has a job placement and retention rate of 90 percent. The Customer Service Skills Center, another training program, has a 65 percent job placement and retention rate, she said.
Last year alone the city’s Small Business Development Center made more than $3 million in loans to businesses.
“This program has been invaluable in terms of what it has meant to residents in terms of job training, job creation, job retention, and our ability to nurture small businesses that otherwise wouldn’t exist here,” said Farber.
Small business owners based in Jersey City who were interviewed last week said they, and their employees, were among those most helped by the UEZ concept. They said they are concerned about the future of the program.
Karen Davis-Farage, general manager of Pole Position Raceway, who founded the company with her husband, said the presence of a UEZ in Jersey City was a deciding factor when they looked for a place to base their operations.
“We knew that we needed to find a geography that had at least 800,000 people within 30 miles,” she said. “So, we could have gone almost anywhere. What set Jersey City apart was that when we met with Jersey City … the UEZ was there answering the phone and making very appropriate introductions…Since then, we’ve put people to work. We’ve put people back to work. We’ve given people their first jobs on the books.”
The company currently has a staff of 40 people, about 10 of whom are full-time, Davis-Farage said. Hourly employees get $12 an hour, more than the state’s current minimum wage of $7.25.
“I’m very concerned that other beginning small businesses might lose the opportunity that we had when we first got started,” Davis-Farage added.
Pole Position Raceway was also lured to Jersey City, Farber said, with the help of a Relocation Grant issued through the UEZ.
Mark Albiez, a spokesman for state Sen. Brian Stack (D-33rd Dist.), who represents a portion of Jersey City, said last week that Democrats are considering new legislation that would essentially replace the current UEZ Program.
Jersey City’s UEZ will continue to operate until at least next summer, said Morrill.
“Currently, our [program] has enough funds to continue operating through the end of June 2012,” she said. “We are awaiting word from the state as to how those funds can be appropriated.”
To help make up for the possible loss of the program, Morrill added, the city is “looking for additional funding sources for marketing, tourism, and business retention/relocation programs that are operated through our Economic Development Corporation.”
Meanwhile, Democrats in the legislature are trying to pull together enough votes to override some of Christie’s public safety and child welfare cuts. This move would require a two-thirds majority in both the state Senate and Assembly and would require a few Republicans to vote with them.
E-mail E. Assata Wright at awright@hudsonreporter.com.