Mayor Andre Sayegh’s move to raise property taxes – second time since taking office last July – was rejected by the City Council on Tuesday night.
Sayegh sought to raise property taxes by 2-percent. He wanted the municipal levy to increase from $156 to $159.2 million (excluding the library tax), a $3 million tax hike, for fiscal 2019-20.
Council members refused to consider the hike and approved a zero-percent preliminary levy, allowing Sayegh’s administration to send out property tax bills.
“2% is not a 2% increase on individual properties,” argued Sayegh’s chief of staff Kathleen Long at the meeting. The city’s tax base increased from $5.8 billion in 2018 to $6.2 billion in 2019, largely due to a better housing market that has pushed up prices which were captured in last fiscal year’s annual reassessments.
Long explained the increase will mostly fall on the property owners whose assessments increased last fiscal year. She also tried to explain the bigger tax base meant the tax hike is being spread amongst many taxpayers which is producing a reduction for most property owners.
An average home assessed at $192,400 will see a municipal tax reduction of $113, according to Long’s data. Despite the municipal portion reduction, homeowners will see a bigger tax bill due to increases in Passaic County and school taxes.
Some council members were skeptical of her information. She tried to make the point by giving an example about renting a vacation house at the Jersey Shore for a week. If rent was $1,000 last year and increased to $1,200 this year, by spreading the cost among more people it becomes cheaper for everyone.
“If I bring my brother and his family, we’re spreading the cost among more people,” said Long. “Now more people are chipping into the pot that’s how the cost goes down.”
Councilman Michael Jackson took offense at the apparent innocent example.
“It’s a very poor example, Ms. Long,” said Jackson. He said there are families that cannot afford rent in the city and have to share apartments. “We’re making examples of taking trips to the Jersey Shore. It’s embarrassing.”
Jackson called Long’s example “very insensitive.”
Long was a target for those seeking to attack the mayor, who was not present at the meeting to make the case for his tax increase. Sayegh has struggled to run the city since taking office.
“The cheerleader’s part is over,” said Luis Velez, 5th Ward councilman, referring to Sayegh’s remarks during the campaign that he will be a cheerleader for the city and let his business administrator run the government. “We’re not seeing the revenues coming in. I don’t feel comfortable increasing the levy.”
“We’re asking the community to pay more,” said Jackson, who accused the mayor of corruption and fattening the paychecks of his hires. “There’s no increase in services.”
Other council members also said Sayegh’s administration is failing to provide basic services to residents. Indeed, residents for months complained to the mayor and council members about recycling not being picked up and street sweepers failing to show up.
“We don’t want to hear excuses. Taxpayers don’t want to hear excuses,” said Flavio Rivera, councilman at-large, chairman of the finance committee.
Public works employees complain about lack of equipment, but Rivera has been open to approving funds to buy equipment for them. He said the administration has yet to provide him a list of the equipment public works needs to effectively provide services to residents.
“We get the brunt of everything that happens that the administration should be called out on. On everything — everyone comes here to complain, to yell at us, to curse at us,” said council president Maritza Davila.
“There is no plan. The plan has been to increase taxes, get the money from homeowners, and we’ll figure it out next year. And apply again for transitional aid,” said Lilisa Mimms, councilwoman at-large. “It’s unacceptable.”
But Long’s presentation had a timeline to reduce the city’s reliance on state aid. Over the next three years of Sayegh’s reign, reliance on state aid would be reduced to $24.65 in fiscal 2020, $20.9 in 2021, and $17.8 million in 2022. Last year, the state gave the city $33 million in transitional aid.
There was no support on the council for the 2-percent tax increase prompting Al Abdelaziz, 6th Ward councilman, and Rivera to recommend a zero-percent levy to send tax bills out.
Sayegh administration officials repeatedly argued the state requires the city to increase taxes by 2-percent.
“I don’t think it’s wise to forego paying $3 million to get $25 million,” said William McKoy, 3rd Ward councilman, referring to state aid.
McKoy, the longest serving member of the City Council, warned his colleagues about delaying the inevitable. Sayegh is almost certain to put the 2-percent increase in the introduced budget in autumn.
Rivera said the state doesn’t require an increase at the moment. Council members said Sayegh’s administration needs to put together a budget before striking a levy. He pointed out there should be a big reduction in spending after the council approved an ordinance creating a sewer utility last year.
McKoy said a tax levy hike later in the year will mean homeowners having to scramble to come up with the money in two quarters rather than four.