Mayor Andre Sayegh’s administration is seeking $40 million in financial assistance from the state government.
Sayegh’s team had been grappling with a more than $50 million budget shortfall over the past months. The deficit is driven by the following revenue losses:
- $8.6 million surplus the city had last fiscal year — this year it has no surplus
- $4.55 million drop in tax collection
- $1.28 million drop in interest and costs on taxes
- $2.86 million federal SAFER grant loss (grant ended)
- And $121,117 decline in ambulance fees, according to the city’s transitional aid application submitted to the New Jersey Department of Community Affairs (DCA) last month.
Municipal officials said the deficit has been reduced to $40 million. Part of it includes an increase in property taxes from $155.22 to $158.32 million, $3.1 million increase, according to documents provided to council members.
“I hope we have a plan if they don’t give us the additional $13 million,” said Flavio Rivera, councilman at-large, chairman of the finance committee, last week. “We can’t just raise taxes.”
Last year, the state provided $27 million in transitional aid.
“Of course, we have a plan,” responded business administrator Vaughn McKoy. He said the administration is making “tough decisions.” He has directed all departments to freeze spending and a hiring freeze has been imposed, he said.
180 vacant positions have been eliminated from the budget, said the business administrator.
Some council members did not view these actions as “tough decisions.”
“Those positions were never filled. That’s not a tough decision,” said Shahin Khalique, 2nd Ward councilman.
McKoy pushed back against the council. He said some council members have advocated for pay increases for some employees that has contributed to the shortfall.
Finance director Marge Cherone told council members the state is likely to grant half — or $6.5 million — of the extra aid requested.
Rivera had suggested the administration prepare for a layoff in case the state does not provide the entire amount.
The finance director and the business administrator downplayed sending layoff notices. But, in their transitional aid application, the administration states, “The city may consider issuing a general layoff notice.”
The city is cutting 7 public safety telecommunication jobs, saving $189,000, via the merger of police and fire dispatch operations.
A tax lien sale scheduled for late November will raise a projected $1.5 million, said Cherone.
The city won’t receive an award letter from the state until early 2019, according to municipal officials. Some worried by that point the money will have been spent on services and little room would remain to cut spending.
“I don’t want to be backed up in the corner,” said Al Abdelaziz, 6th Ward councilman. Some pointed out that has happened in the past years.
The Sayegh administration will present an introduced budget to the council this month.