The public will get a peek at the first calendar year budget in more than 20 years at a budget hearing scheduled for May 9, following the Bayonne City Council caucus at 3:30 p.m.
Last year, the city changed from a fiscal year budget to one that is based on the calendar year, in order to better line up with state aid and other funding elements.
Since July, the city has operated under a transitional budget, so the budget introduced at the March 14 meeting is the first full year budget.
As introduced, this budget is about $2 million less than the last full fiscal year budget in 2010-2011. But Chief Financial Officer Terrence Malloy said the budget numbers will rise because the city has not yet received all of its grants.
The budget – which is still a work in progress – includes about $48 million in anticipated revenue and about $66 million that must be raised from taxes.
As introduced, this budget will need to raise about $66.8 million from property taxes, up from about $66.7 million.
“This is a good news budget and a bad news budget,” Malloy said. “While we have made a lot of progress in cutting costs, we were hit with a lot of tax appeals and declining ratables.”
“This is a good news budget and a bad news budget.” – Terrence Malloy
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Small tax increase anticipated
The budget will mean a small tax increase, Malloy said, which is based on two factors: loss of rateables city wide, meaning that the remaining taxpayers will have to bear a greater portion of the overall tax burden; and tax appeals, for which the city is required to refund to people who successfully appeal their assessments.
The tax rate last year was $28.77 per thousand in assessed value of a home. This rate rises to $29.15 as a result of the loss of rateables, Malloy said. Tax appeals bring this up to $29.19 per thousand.
Not including the school or county taxes, taxpayers will see a $5.32 increase in an average home assessed at $133,000.
Malloy said this year’s budget pays off $11.5 million in debt, which will reduce future interest costs.
“Gov. [Christopher] Christie’s changing of the pension plan also produced a savings to the city,” Malloy said. “We also received a payment in lieu of taxes from the Alexan property for $2 million.”
The city also uses a bulk sale for delinquent taxes that sells off tax liens to a private company, which then collects the debt.
Also because the system for collecting taxes brings in such a high rate every year, the city budget does not set aside money as would be required by the state if the percentage was too low.
But this budget does set aside $1.5 million against future tax appeals.
“We don’t know how many we will receive since the deadline is April 1,” Malloy said.
On the positive side in regards to future cost savings was the city takeover of operations of the Bayonne Parking Authority and the cross-training of parking enforcement officers as crossing guards.
“This gives us greater flexibility when it comes to crossing guard posts,” Malloy said. “In the past, if a crossing guard called in sick, we would have had to use higher salaried police officers to cover those posts. Now we can use parking enforcement officers instead.”
The city was able to save money through the Hudson County Utilities Program and the Hudson County Improvement Authority’s financing program, which allows the city to take advantage of extremely low interest rates.
Although the city is still going month to month with its trash collection contract due to ongoing litigation over who was the low bidder in the last round of bids, the city made the decision to award contracts year by year rather than three-year blocks as had been the tradition.
“The cost of trash collection has been coming down,” Malloy said. “By awarding yearly contracts, we can take advantage of the declining prices.”