A tax wary city council rejected a temporary budget presented by mayor Jose “Joey” Torres’ administration to run city government for the next two months.
Absent a temporary budget the city will not be able to pay its almost 2,000 employees in December, warned business administrator Nellie Pou. She said the city also will not be able to pay its debt.
Torres’ administration wanted a $50 million appropriation to run government from December through January, according to city records. The city has been operating through a series of temporary spending measures since the fiscal year began in July.
By January 2016, the city would have used up more than $152 million, said Kenneth Morris, councilman at-large. The city’s budget last fiscal was $252.6 million, according to city records.
“If we continue at this pace we’re going to hit $260 million at the end of the year,” said Julio Tavarez, 5th Ward councilman.
The council adopted a preliminary introduced budget of $283 million – with the expectation to reduce it further prior to final adoption — to be able to apply for state aid.
Last year the city received $25 million in transitional aid.
“The way it’s going right now eventually it’s going to be $283 million,” said Mohammed Akhtaruzzaman, 2nd Ward councilman.
“It cannot,” said Russell Forenza, budget officer.
“The law does not allow us to go beyond the two-percent cap,” said Pou.
The city has been going beyond the two-percent by utilizing various exemptions like health insurance and debt service.
Council members want to see spending cuts so as to avoid further taxing city property owners. Morris, chairman of the council’s finance committee, and others did not feel the administration was cutting spending.
“It creates a scenario where as we move further along this path at some point the administration will be taxed with finding money to reduce the budget,” said Morris. “My concern is that as you get further down the stream the only place you’re going to find those types of dollars are in bodies or salaries.”
Morris said even a reduction in force will not be enough.
The temporary budget appropriation resolution required six votes to pass the nine-person council.
Council members William McKoy, Maritza Davila, Michael Jackson, and Ruby Cotton voted in favor of the budget while Andre Sayegh, Akhtaruzzaman, Morris, and Tavarez voted against.
Alex Mendez abstained from the post-midnight vote.
The city’s six ward seats are up for grabs in next year’s municipal election which may have also played a part in the temporary budget rejection. Torres intends to back a slate of candidates for next year’s election, a move that has alienated many on the council who will be defending their seat next year, according to political insiders.
After the vote Pou warned council members the city will not be able to pay its employees after the next payroll period.
“Does this mean the council will not get paid?” asked Davila.
“No one will get paid,” responded Pou.
Cotton said last time the city voted down a temporary measure, former mayor Jeffery Jones was forced to make payroll at the behest of the state.
“We can run the government without the council’s approval. DCA [New Jersey Department of Community Affairs] can take over,” said Pou.
Torres could not immediately be reached for comments on Wednesday morning.