Taxpayers in the mile-square city are set to pay more in city and public school taxes under proposed budgets that were separately introduced this past week.
The increases are in line with a trend Hoboken has seen in recent years. If the introduced budgets are adopted, it would mark the third consecutive hike for the city and fourth consecutive for schools.
The proposed 2016 municipal budget for the City of Hoboken would increase taxes by 3.5 percent, with the total budget growing to $107 million from $103 million last year. It was introduced by a vote of 7-0 at the public meeting on Wednesday, March 16. It goes to a final vote at a meeting on April 20, but the public can weigh in beforehand. Councilmen David Mello and Michael DeFusco were absent from the meeting.
At a special Board of Education meeting on Thursday, March 17 – which no one from the public attended – board members introduced a budget of approximately $69.7 million. This was an increase from last year’s $67.9 million.
“The council rolls up its sleeves to go through the budget workshop process…to identify areas where there might be savings.” – Ravi Bhalla.
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It includes an increase in the amount from taxes (the tax levy), from $41 million to $42.5 million.
The budget will be open for discussion at the next school board meeting on April 12, prior to the final budget hearing on May 10. Residents can send questions to the school board by emailing budgetquestions@hoboken.k12.nj.us.
Hoboken property owners pay property taxes that go to three entities: the city, county and public schools, as well as smaller taxes to fund open space and the public library. The county budget will be introduced in May or June.
City budget workshops
Residents are invited to provide their input on the city budget at special Monday budget workshops at City Hall, 94 Washington St. at 6:30 p.m.: March 21 (Community Development, Departments of Health and Human Services, and Environmental Services), April 4 (Departments of Public Safety, and the Administration), and April 11 (Office of Corporation Counsel and Department of Transportation). The public hearing on the municipal budget will be held on April 20.
“I’d like to keep taxes down, but this is one of those years where we have some major cost drivers,” Mayor Dawn Zimmer told The Hoboken Reporter outside the council chambers on Wednesday.
For the average residential property in Hoboken, which currently has an assessed value of $519,000 according to city officials, the municipal portion will increase by $67 to $2,528 in taxes this year.
The budget increase is largely due to a $1.8 million net increase in health insurance premium costs for city workers, officials said at the council meeting.
Hoboken Business Administrator Quentin Weist and Finance Director Linda Landolfi said the total would have been $2.7 million had city employees not been mandated to contribute to their premiums.
“In the tail end of 2015, we moved over from a premium based medical plan to a self-insured medical plan…[The] employees have now partnered with the city in paying for healthcare costs — not that they necessarily like it,” Wiest told councilmembers.
Among the other “major cost drivers” inflating the budget are a down payment of $600,000 on $12 million anticipated for the Washington Street redesign plan, returning $500,000 to taxpayers who successfully filed tax appeals, and another $500,000 for a capital improvement fund.
The redesign for Washington Street, approved in February, will replace the 100-year-old water mains, repave the entire roadway, add new safety measures, and implement bike lanes in portions of the roadway.
Five million for the project has already been earmarked from a low-interest loan courtesy of the New Jersey Environmental Infrastructure Trust (NJEIT).
As far as new capital projects, outside of the $870,000 allocated from the budget, the city will need to seek other forms of payment to fund similar ventures such as new bonds (contingent on the City Council’s future passing).
The budget includes $950,000 in debt payments toward the city’s $20 million capital improvement plan. Hoboken anticipates $20 million in new capital improvements for 2016, said Landolfi during the presentation. According to slides, estimated totals for projects include $2.3 million for building renovations, $1.2 million for park renovations (including the 9/11 memorial which officials hope to break ground on in the fall) and $2.4 million for parking garage renovations.
Excluding grants and the library tax, Hoboken’s tax levy will be offsest by $14 million in PILOTs and abatements (property tax payments from developers), $11.1 million in state aid, $4.1 million in Parking Utility surplus, $4.9 million in court fines and costs, $1.7 million in the parking tax, $2 million in construction fees and $500,000 in FEMA reimbursement, according to city spokesperson Juan Melli.
“The administration is introducing the budget, kind of [like] passing the ball to the City Council. [Now the] city council rolls up its sleeves to go through the budget workshop process…to identify areas where there might be savings,” said Council-at-large Ravi Bhalla.
Growing public school population, including in charter schools
In the past, the public could vote on the school budget each April. But since 2012, this has not been the case. There is no public vote as long as the increase stays within a state-mandated cap of 2 percent. (The state can make exceptions if the school population is growing.)
School taxes have gone up slightly every year since 2012.
The need for this year’s tax increase, school officials said, is related to the hiring of nine new teachers, growing payments made out to charter schools, and relatively flat state aid.
The district foresees dispersing $9.2 million to the city’s three charter schools in the next school year (Hoboken Dual Language Charter School-HoLa, Hoboken Charter School, and the Elysian Charter School); a 7.2 percent increase over the current year. The district is required to provide 90 percent of the funding (under the current state formula) for each charter school student living in Hoboken.
Since 2007 when charter schools received $2.8 million, School Business Administrator William Moffitt said, payments to charter schools have increased by 230 percent.
School administrators estimate charter school enrollment will increase from 726 students to 772, an increase of 46. HoLa makes up 44 of that estimated increase, as it is expanding next year to seventh grade. The school board has been fighting in court to prevent HoLa from expanding, a move that has caused some controversy.
At the start of the meeting Hoboken Superintendent Christine Johnson said that the state projects an increase of 99 public school students for the coming year (not including charter schools), but the district itself predicts 137 new students.
Moffitt said the public school student body (excluding charter school students) is currently made up of 2,580 students. Johnson said that due to recent enrollment growth the district was allowed by the state to grow the tax levy by 1.77 percent over the 2 percent legal cap.
Steven Rodas can be reached at srodas@hudsonreporter.com.