Mayor Jose “Joey” Torres’ administration received approval for a $64.34 temporary budget for the first three months of the new 2018 fiscal year. The administration also secured approval for a preliminary tax levy.
Council members commended the Torres administration for presenting a flat preliminary tax levy. The administration is seeking to raise $151.32 million for the first half of the 2018 fiscal year, according to the resolution approved by the council on Friday afternoon at its closeout meeting.
Impact on homeowners
The flat tax levy will result in a $286 saving for a homeowner whose property is assessed at $254,700 and $233 for a property assessed at $198,500 (average assessment of a Paterson home) in the third and fourth quarter tax bills, according to calculations the administration provided to the council.
Calculations are based on a 4.16-percent tax rate.
With median household income stuck at just $32,915 (less than half of state average $72,093), city families have been hit hard by property taxes increases over the past years particularly under former mayor Jeffery Jones’ administration when property taxes increased by double digits.
Councilman Kenneth Morris, chairman of the finance committee, credited the administration for producing a flat levy.
“The tax levy is flat. There’s no tax increase,” said Morris, councilman at-large.
“Administration has done a great job,” added Luis Velez, 5th Ward councilman.
The business administrator said the early approval of the preliminary tax levy will allow the city to send tax bills out on time. This year’s preliminary levy was approved at the closeout meeting; typically, the administration waits until the start of the fiscal year before presenting a preliminary levy to the council.
The city has been late in mailing out tax bills over the past several years.
The $64.34 million temporary budget covers the first three months – July, August, and September — of government spending for the 2018 fiscal year.
Council members approved the temporary budget without opposition at their Saturday afternoon reorganization meeting. Morris asked business administrator Nellie Pou whether the administration is confident a budget will be presented after the three months.
“A lot of it is contingent on transitional aid award,” replied Pou. The state awarded $25.25 million in aid to Paterson last year. She said the application for state aid opens up towards the end of September. The city is likely to seek between $25-$29 million in state aid this fiscal year, according to officials.
In the fiscal year that ended on June 30th, 2017, the administration introduced a budget in early November that was adopted in late February after the city was provided a state aid figure.
Councilman Alex Mendez urged both the business administrator and finance director Marge Cherone to start the budget preparation process early on in the fiscal year.
“We have a tendency of backing into recommended budgets,” remarked Morris. When a budget is not presented to the council early on in the fiscal year, the administration often spends more than the council would like. The spending though is done through temporary budgets that the council has to approve; however, council members seldom raise spending questions until the very last one or two temporary spending measures which is often too late to curb or control spending.
The city’s new 2018 fiscal year started on July 1st, 2017.
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