Torres administration introduces preliminary $283 million Paterson budget
By Jayed Rahman
Published: October 28, 2015
Mayor Jose “Joey” Torres’ administration introduced a precursory $283.2 million budget on Tuesday night that shows a $30.6 million increase from last year’s $252.6 million adopted budget, according to city records.
The fiscal year 2016 preliminary budget shows an 18-percent jump in the municipal tax levy to $174.3 million from last year’s $148.2 million. There’s $26 million gap in the budget largely due to increases in health insurance, reserves for uncollected taxes, and debt service, according to city officials.
Health insurance increased by $6.6 million from last fiscal year. The insurance line item is $49 million in the 2016 preliminary budget compared to $42.4 million last year, according to budget documents.
There’s also $12 million the city has set aside for contractual obligations as the city seeks to strike several collective bargaining agreement – one going back five years — including with fire and police.
Torres previously said at least the police contract will be struck by New Year’s Day.
Municipal debt service also increased from $11.9 million last year to $15.5 million marking a $3.6 million increase, according to the preliminary budget.
Reserve for uncollected taxes – calculated using a state formula, according to officials – increased by $3.25 million. Last year’s reserve for uncollected taxes was $13.6 million. This year that number is $16.8 million.
“This is a budget no one sitting up here will adopt,” said Kenneth Morris, councilman at-large, who serves as the chairman of the council’s finance committee. “It would be absolutely illegal if not criminal to pass a $174 million budget,” he said noting the two-percent tax cap.
The cap has exemptions for debt service, insurance, and so forth. The city needed to have an introduced preliminary budget in order to apply for state transitional aid, according to officials. Last year the state provided the city $25 million in aid.
“There’s really no economic or revenue enhancement plan,” remarked Andre Sayegh, 6th Ward councilman. “What’s the plan? Where’s the plan?” He didn’t think the Torres administration was doing enough to raise revenue through other channels besides upping taxes on homeowners.
“I’m a little uncomfortable,” said Alex Mendez, councilman at-large. He and others have said the city has to cut spending.
Morris said the budget woes cannot be overcome through furloughs or reduction in force which will be “disastrous.”
“The administration has to find significant savings in this budget and they are not going to be able to do that through a reduction in force,” said Morris. He said the city still incurs 60-percent of the costs for a period of time in layoffs.
“It’s not going to be done through furloughs,” he said that would generate a paltry sum.
Council members approved the introduction of the budget in a 5-3 vote. Council members Julio Tavarez, Sayegh, and Mohammed Akhtaruzzaman voted against the measure. Administration officials – as the vote neared conclusion – thought they did not secure the needed the ostensible super majority needed to pass the measure in order to meet the state deadline to file the aid application.
The measure required a simple majority.
Business administrator Nellie Pou warned had the city failed to pass the measure the municipality would be facing a $50 million deficit without state financial assistance. “You’re talking about a $50 million deficit,” she said.
Akhtaruzzaman said property owners are “suffocating” under the burden of taxes. In the past weeks city taxpayers have been coming out in droves to council deliberations complaining about large tax bills.
“There’s going to have to be some very hard choices,” said Morris.
The city has scheduled a public hearing on the budget for December 1st, 2015 at 7 p.m. in city hall.