Mayor Jose “Joey” Torres’ administration offered to cut the preliminary tax levy by $7 million on Tuesday night while highlighting the impact severe cuts will have on services and the city’s finances through the loss of federal grants that allowed for the hiring of police and firefighters in the past years.
Business administrator Nellie Pou presented the council with three scenarios to point out even a $30 million cut in the tax levy will not produce significant percentage reduction in the tax rate. She offered to reduce the preliminary levy from $154.6 million to $147.6 to a skeptical city council.
Pou said this will reduce the budget by $21 million. She stated that there is $14 million in expenses in the current budget due to the settlements of police and fire contracts, the surplus that helped to plug a hole last year, workers compensation and liability insurance increases, and the 27th pay for employees (this comes around every 11 years).
The cuts will reduce the tax rate from the proposed 4.359 to 4.324-percent. The $7 million in levy reduction at a time when different contingents of homeowners appear before the council to speak out against tax increases did not appear enough to council members.
These are “phantom reductions,” said Kenneth Morris, councilman at-large, chairman of the finance committee. He said the ostensible reductions the administration is making now will return at a later point in the budget year.
In fact, last year, the council forced the administration to make cuts, but those “artificial cuts” were never made, indicated officials.
Pou painted a dire picture of the impact the reductions will have. She said millions of dollars in federal grant money used to hire firefighters and police officers will have to be returned if the city lays off public safety employees.
She said the city will be banned from applying for future public safety grants. Cuts could also eliminate an entire fire company and an ambulance. One ambulance produces $1 million in billing per year, said the business administrator.
“It would not save us any dollars,” said Pou. 75-percent of the city’s payroll goes to public safety employees. Layoffs made elsewhere will have negligible result — $1 million at most, said officials.
“If we cut police and fire by $20 million, response time is going to double,” said Michael Jackson, 1st Ward councilman, pointing to the already terribly slow police response.
Luis Velez, 5th Ward councilman, suggested the administration begin cutting political hires, like the mayor’s chief of staff. He said Torres promised all sorts of property tax reliefs while running for mayor, but has settled on the pattern set by his predecessor mayor Jeffery Jones by repeatedly increasing taxes on homeowners.
Alex Mendez, councilman at-large, wanted a list of all vacant positions in the budget. In fact, the administration every year budgets for vacant positions that it never fills only to take the money from one place to another through budget transfers.
Council members said the Torres’ administration does not have a vision or a plan for the city. Many pointed out the embattled mayor has not been able to produce revenue sources other than homeowners.
“An efficient administration would analyze projected revenue during the year not at the end of it,” added Shahin Khalique, 2nd Ward councilman.
“We need to cut a little more,” said Maritza Davila, councilwoman at-large.
Pou pointed out that the rate increase is largely due to the millions of dollars increased by the state-operated school district, Passaic County government, and the Open Space tax. She also said the city could not reduce its budget more than 5-percent by state statute.
“It didn’t say it wasn’t permissible. We just need approval from DCA [New Jersey Department of Community Affairs],” said council president William McKoy. He said homeowners cannot afford to continue paying large increases every year.
“Folks are totally tapped out,” said the council president.
Jackson was the sole vote in favor of the mayor’s tax levy. Khalique, McKoy, Mendez, Morris, Davila, Velez, and Andre Sayegh voted against.
Ruby Cotton, 4th Ward councilwoman, is away on vacation.
Tax bills for August will not be going out, said the business administrator after the vote. She said the city may have to borrow money to pay its bills due to a shortage of funds at the coffers until the impasse is resolved.