After increase, tax bills to come back down

Weehawken passes $37.1M budget for 2008-2009

Weehawken homeowners who had to suffer from a 7.2 percent property tax increase in the first two quarters of the current fiscal year will see some relief in their third and fourth quarter bills.
While taxes will not return to what they were before the increase, the amount of the initial increase will be cut in half for the next two quarters, officials said, so taxes will be lower in the new bills than in the first two quarters.
On April 22, the Weehawken Township Council adopted a delayed budget of $37.1 million to run the town from last July 1 through this coming June 30. The budget was passed so late in the fiscal year because of a lengthy process and delays from the state, which did not release its state aid figures until March of the current year.
While waiting, Weehawken had introduced a temporary budget in September, which included an estimated 7.2 percent increase that showed up in residents’ February and May tax bills. It amounted to an increase of approximately $375 over two quarters for owners with an average assessed value of $200,000 on their home.
Once the state aid came through in March and substantial cuts were made to offset town expenditures, the Town Council was able to pass the amended budget with more savings.
Spending is up nearly $3.7 million from the 2007-2008 budget of $33.4 million. But the town has cut employee hiring and has brought some previously contracted services in-house this year, Mayor Richard Turner said.
Weehawken’s tax rate typically goes up between 2 to 3 percent annually due to increases in salary, benefits, and other miscellaneous costs, Turner said.
“We raise the tax rate about 2 to 3 percent a year overall,” Turner said. “The average increase statewide is 7 percent, and we are well below that.”
The new tax bills will only have an increase of less than 1 percent over last year, which will offset the 7.2 percent increase in the previous two bills.
Many towns, due to declining state aid and increasing benefits and fuel costs, had to raise taxes this year. Mayor Richard Turner said that Weehawken lost $300,000 in state aid this year.
Property owners pay taxes that are divided among three entities: the schools, the county, and the town. The Weehawken budget only affects the town portion, while the county and schools come up with their own budgets each spring.

The savings

In March, Weehawken received $2 million in extraordinary state aid.
“This is one-shot state aid, which will help deal with the increase in property taxes,” said Turner.
Weehawken officials requested permission to raise taxes this year by a total of $1.9 million, which is more than the 4 percent increase allowed by the state. The town got permission from the state at a Local Finance Board meeting on April 15.
At the same meeting, Weehawken received approval for a budget-cutting measure that a lot of towns took advantage of this year. Because of a bill passed in the state legislature, towns were allowed to defer payments to a state pension fund for one year. However, they will have to start paying them off next year, with interest.
Weehawken was able to defer 50 percent of this cost, which resulted in $700,000 in budget savings for this year only.

Revenue down

Turner said that the town has lost $2 million in revenues that stopped re-occurring last year. They lost $1 million in construction fees, $670,000 in taxes from new construction, and $300,000 in payments in lieu of taxes. The town also experienced a $200,000 loss in parking tax revenue from the ferry due to the declining ridership. In this year’s budget, they had to make up for the losses both from last year and this year.
“During these difficult economic times, we are facing the same problems as all families,” said Turner. “Unexpected revenue shortfalls happen and you just never know. That is why you always stay on top of your revenues.’
The town also had to deal with salary increases. Two years ago, they reached a settlement with their unions to pay $1.2 million in retroactive increases for municipal employees. The remaining $800,000 of that amount had to be paid this year.
“We started off [the year] having to offset all the lost revenue and an increase in expenditures,” said Turner.

Cutting costs

Among the ways the town offset costs was with the creation of the Weehawken Parking Authority, which will increase enforcement and draw income from violation fees. In previous years, the town enforced regulations, and Weehawken only received a portion of the violation fees.

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Weehawken started a hiring freeze this year with the exception of one new police officer.
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The town also recently began its own garbage collection, which was originally contracted out to a private company. With these in-house measures taking place, the town will be able to continuously save money.
Both new departments were filled with existing personnel transferred from other departments.
“We found a way to offset our expenses and our costs, and have transferred employees instead of laying them off,” said Turner.
In addition, Weehawken started a hiring freeze this year with the exception of one new police officer, and cut back on all but necessary overtime. Other vacancies from resignations and retirements will remain unfilled.
A purchasing freeze has also been put into place, and while the Police Department has had promotions, the members have agreed to temporary hold off on salary increases.
“We looked at everything across the board,” said Turner.
Any other projects to go forward this year – such as repaving roads – will have to be funded by available county, state, and federal grants or they won’t get done.
The original projected tax increase for Weehawken would have been 10 to 12 percent had officials not taken these measures to offset costs, and had they not received state aid, Turner said.
“Fortunately we saw the [financial] crisis coming and we moved quickly to deal with it,” said Turner. “I want to compliment the work of the Finance Department, and the state was a great help.”
According to Turner, all mayors throughout the state of New Jersey, as well as the state legislature representatives – State Sen. Brian Stack, Assemblyman Ruben Ramos, and Assemblywoman Caridad Rodriguez – were lobbying for state aid cuts to be kept to a minimum.
“It shows what you can do by working together on all different levels of government,” Turner said.

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