As the city administration pours over its revenues and payments, Bayonne residents and business owners wait for the news that they probably will not like: the percentage their taxes will go up in 2015.
How much taxes will rise may or may not be known at city hall right now, but Business Administrator Joseph DeMarco said there will be an increase.
The city’s structural debt still exists, and the city must begin to pay down that debt, both DeMarco and Mayor James Davis have said.
Some of that debt goes back a decade or two, according to those familiar with city finances.
DeMarco said it includes not only old debt, but also that of the Bayonne Local Redevelopment Authority and the Bayonne Parking Authority, two public entities dissolved in the last few years whose debt the city absorbed. The BLRA was charged with attracting developers and others to the former Military Ocean Terminal after the Army turned it over to the city following its closure.
“You put that all onto the city’s so-called credit card and that debt – and the payment on that debt – exceeds current revenues at a level of $24 million a year,” DeMarco said. “To be fair, it’s lower now than in past years.”
DeMarco said the level was closer to $30 to $36 million a year, but that some of that debt was retired with a United Water deal and some “one-shot” revenues that the city had employed in the past.
DeMarco said he is charged with lowering that debt while ensuring that municipal services do not suffer.
A common refrain he hears is that trimming the city’s payroll would help. But with the city’s large structural deficit, that would not even be enough.
“If I laid off all the municipal workers we still would not solve the budget shortfall,” DeMarco said of the $18 million a year Bayonne pays out in city salaries. (That figure does not include police officers and firefighters.)
“It’s anticipated that there will be a tax increase.” – Joseph DeMarco
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DeMarco said Bayonne’s revenues will now start to increase as the city has settled two lawsuits – and is nearly done with the third and last one – which have stymied development on the Peninsula at Bayonne Harbor, the former MOT.
Future looks positive
“This frees up the sale of the land on the Peninsula, and that in turn adds to the tax base,” he said.
More developments in other parts of the city, such as at the former A&P, Texaco, and Best Foods sites, and Broadway will further aid the city in its rebound.
“It’s a good mix, not all residential,” DeMarco said.
While this development is planned, the city is keeping an eye toward assuring that city services like schools, roads, and parks will not be overtaxed.
Next steps for budget
Residents and business owners will find out more when the municipal budget is introduced at the City Council’s April 15 meeting.
On Friday, March 13, DeMarco was listed on the March 18 meeting agenda seeking permission to address the council on the 2015 municipal budget. He and Chief Financial Officer Terrence Malloy will talk about the city’s state of finances.
Joseph Passantino may be reached at JoePass@hudsonreporter.com.To comment on this story online visit www.hudsonreporter.com.