The state has awarded $25 million to the city in transitional aid, $2 million more than it granted last fiscal year.
Mayor Jose “Joey” Torres’ administration was notified of the award via a letter dispatched from the New Jersey Department of Community Affairs on Thursday afternoon.
“We are confident that, with the technical assistance of the Division, Paterson can balance its budget with this level of funding while including a levy increase that is less than proposed in the introduced budget,” wrote Timothy Cunningham, director of the division of local government services, in the award letter.
“It’s $2 million more than what we got the prior year, but $2 million less than what we asked for,” said Kenneth Morris, councilman at-large, who chairs the city council’s finance committee. “Given the fiscal challenges the city has, I’d have been more appreciative if the state had a willingness to provide us the municipal aid to the level we requested, but I also understand given the state’s fiscal crisis that may have been difficult for them to do.”
The city sought $27 million in aid from the state.
Morris said the administration will still have to reduce $3 million from the city’s budget to remain within the 2-percent property tax cap.
The Torres administration introduced a $252 million city budget in October of last year, $6 million more than 2014’s $246 million budget. The introduced budget had a gap of $7.5 million.
City officials explained the shortfall is due to debt service payment, reserve for uncollected taxes, and differed charges. $3.4 million in debt service, $2.9 million reserve for uncollected taxes, and differed charges $.88 million.
The city council during a series of budget hearings cut $3 million from that budget, said Morris. It remains to be seen whether the administration will incorporate those cuts into the final budget.
“This late into the fiscal year, there’s very little flexibility for the administration to make cuts,” said Andre Sayegh, 6th Ward councilman. He said nine-month into the fiscal year which began on July 1st of last year it will be difficult for the administration to un-spend money it has already spent.
“I just don’t want this budget balanced on the backs of the taxpayers,” said Sayegh. Morris said city taxpayers will likely feel some tax relief towards the end of the 3rd quarter and into the 4th quarter because the tax bills that went out this month were based on estimates.
Torres’ introduced budget had a 5.2-percent tax hike for city property owners.
Morris said the city has to tighten its purse strings by avoiding unnecessary hires and having a conversation about salary increases.
“I think it’s a great thing for the City of Paterson because last year we got $23 million” said Mohammed Akhtaruzzaman, 2nd Ward councilman. “Every penny counts, its good news.”
Torres could not be reached for comments. He is reportedly sick at home.