The city did not receive approval from the New Jersey Department of Community Affairs (DCA) for the reduced tax levy to send out property tax bills for August on Thursday afternoon.
“At this time, the Division is continuing to review the levy as passed by City Council and determining next steps,” said Lisa Ryan, spokeswoman for the DCA.
After voting down mayor Jose “Joey” Torres’ preliminary tax levy three times council members reduced the tax levy by $2 million and passed it at a marathon meeting at 1 a.m. this morning.
Torres wanted a $149.73 million preliminary tax levy, but received a $147.73 million from the council. Council members argued city taxpayers are overburdened and cannot afford to continue paying for repeated tax hikes every single year.
The city requires state approval for its levy before it can issue tax bills for August. Council members and the mayor met with officials from the DCA’s division of local government services on Monday for a discussion on the tax levy impasse.
Ryan said it was clear from Monday’s meeting that the state would not approve a levy that caused cash flow issues for the city. The state would have granted quick approval for a $149.73 million preliminary levy, according to officials.
Business administrator Nellie Pou flat out told council members the state may not approve the reduced preliminary tax levy. She told the council there would not be sufficient cash flow in the reduced levy for the city.
“If you don’t have sufficient cash flow, what do you do? You cut expenses so that you do have sufficient cash flow to pay down debt,” Kenneth Morris, councilman at-large, told the business administrator, during that meeting.
City directors have been told to identify employees to cut as the municipality prepares for a reduction in force.
“The earlier decisions on the levy and potential budget cuts are made, the better the outcome for fiscal success,” stated Timothy Cunningham, director of the division of local government services, in a letter to the mayor and council president a day after the Trenton meeting.
Cunningham also stated in the same letter that the division will not “look favorably on a levy that creates cashflow deficiencies” and force the city to borrow money to fund operations.