Balanced budget cuts spending and overcomes unprecedented revenue shortfalls with overall tax increase of 1.4% or $9.50 per month on an average property
The Bhalla Administration today is introducing a municipal budget that overcomes unprecedented budget challenges due to the COVID-19 pandemic including significant revenue shortfalls with a balanced budget that maintains community services. The budget includes a $5.5 million increase in the municipal purposes tax for an overall tax increase of approximately 1.4 percent.
“Like the rest of the country, Hoboken’s economy and finances have not been immune from the coronavirus pandemic. In the face of unprecedented budget challenges compounded by COVID-19 and continuing uncertainty about the virus and the economy, we are putting forward a responsible, balanced budget that provides the services our community expects and continues to invest in our future,” said Mayor Ravi Bhalla. “Through a combination of difficult cuts and new revenue sources, we have chipped away at a nearly $20 million budget shortfall and are introducing a budget that would result in an overall property tax increase of just over 1 percent. I look forward to working collaboratively with the City Council in the weeks ahead as they consider and ultimately adopt a budget.”
While Hoboken overcomes the challenges of COVID-19, the city continues to move forward with major infrastructure and quality of life projects:
Nearly $20 Million Budget Impact
Entering the fiscal year, increased costs and revenue losses created an estimated $7.4 million budget shortfall, compounded by a $6.4 million reduction in regenerating surplus and $5.9 million in added costs and lost revenue due to COVID-19 for a total budget impact of approximately $19.8 million.
Closing the Gap
Through a variety of cost-cutting measures and new revenues, the budget gap has been closed by approximately $10.9 million. In addition, the introduced budget proposes using $3.3 million of the city’s rainy day fund (non-regenerating budget surplus). The remaining $5.5 million gap would be closed by a 9.8% increase in the municipal purposes tax.
Impact on Taxpayers
Because municipal taxes are only 33% of the total tax bill (County taxes are 36%, Schools are 26%, Library is 3% and Open space is 2%) and because this year Hoboken’s share of County taxes are decreasing by 6%, the overall tax impact on property owners from the introduced budget would be an increase of 1.4%, which for the average assessed property in Hoboken of $522,000 corresponds to an annual increase of $115, or $9.50 per month.