Dear Editor:
The recent tax bills going out to homeowners reflect a very old problem in Jersey City that goes back over 20 years. Jersey City is like a business that is ill managed, and when times are good those bad management decisions are not really noticed till the good times end. Well those good times have ended, probably for the next 5 to 10 years.
This mismanagement is from giving out very generous contracts to everyone to help run the city and the massive debt added to the city budget from all those years of bonding. This structural deficit that has never really been defined always shows up as the shortfall in our budget, which ranges $15 to $40 million. Every year the administration in power will use the same tricks to balance the budget. They will use one time upfront payments from tax abated properties that have been approved by the planning board but not yet built. Sell city assets to autonomous city agencies for cash and have those agencies bond for the purchase. Refinancing city debt at very low upfront payments and back loading the higher payments for years later when they are no longer in power. They delay the city’s obligations to fund the pension funds which grow larger every year. Finally they delay introducing budgets for 6 to 9 months into the New Year (spending much of the budget in the meantime) and get the State of NJ to plug the remaining shortfall.
Now we are in the middle of the perfect storm of fiscal disaster. Real estate development has come to an end so there are no upfront funds. Some of those tenants in the waterfront office buildings will move out and the tax abatements payments could go down. Successful tax appeals from apartment buildings and homeowners could lower tax revenues. The State of NJ is $8 to $10 billion dollars in debt and they will no longer fund city budgets. We can no longer refinance our debt at the same low costs as in the past. The city could face a high cost from retiring employees who want to collect the large payments from unused sick and vacation time. Our past and present pension fund obligations must be paid in full. Finally the cost of running the city keeps going up. We can not fix these problems for this year with just tax increases and hope for a miracle next year.
We must create a 5 year plan and budget our future over the next 5 years to create a more stable and efficient government. There has been no will power to tackle these ongoing issues in the past because they entail very hard and painful decisions that must be shared by everyone. We must create a commission that will review the budget and project out 5 years and make recommendations what can be cut and what tax increases must be incorporated over that time frame to keep government running and deliver services with as little disruption as possible. The commission should also audit our governmental structure and make recommendations how to restructure it to be more cost effective and efficient. This commission can be set up consisting of members from employees of City Government, Elected Officials, State Government, members of the business community and non profit organizations. We should put an immediate moratorium on bonding so not to add to our massive debt. We must negotiate with the city unions now and restructure salaries, the cost of insurance and pensions. We must cut those high cost political jobs from the city payroll.
There is no magic bullet to help us. We will see a lot of pain in the near future. Employees will make less money, employees will lose their jobs, and homeowners will pay more taxes and receive fewer services. I believe if we ignore these issues this year we will face much harder and much more expensive decisions next years to come.
Sincerely,
Jeff H Kaplowitz Jersey City