Annual Budget Battle To Begin

The annual Hoboken duel between the fiscally prudent Budget Hawks: Mayor Zimmer, Peter Cunningham, Jen Giattino, Ravi Bhalla, Dave Mello and in limbo Jim Doyle will square off against the fiscally incompetent Chicken Hawks: Michael Russo, Terry Castellano, Tim Occhipinti and the Chicken Hawk Queen Beth Mason.

Hopefully this year Michael will not embarrass himself and his constituents with another “budget on a napkin” politrick, but fiscal incompetence does spring eternal in Hoboken. Luckily for the taxpayers with Peter in charge (unlike mathematically challenged Beth Mason) whatever document is produced will have its numbers added up correctly and not be laughed at and rejected by the NJ DLGS this time.

Mayor Zimmer in her first mayoral campaign in spring 2009 did promise a 25% tax cut. With the recession hitting, in the fall she pledged to reduce taxes but she knew that 25% was too much given our city’s and nation’s economic state. Governments across the nation realized it was prudent to plan for aid reductions, meaning that funds that could normally have been used for tax cuts would instead have to be reoriented to plug budget gaps.

Still most voters forget that Beth Mason promised the same thing:

http://www.nj.com/hobokennow/index.ssf/2009/10/beth_mason_i_can_cut_hobokens.html

Her 3 main ideas were:

1)      Reduce Directors salary: In the past many (but all) Hoboken Directors were picked not because of their competence but for reasons related to patronage or political fence mending. Reducing their (and the Mayor’s) salaries to $80,000 would save between $100-125,000. Unfortunately that would most likely lead to resignations. Since governmental employee unemployment is less than 5% (nearly full employment) it is most likely that new Directors would be like those in the past, less competent and politically oriented, which would not be beneficial for Hoboken citizens:

http://www.hobokennj.org/docs/council/agenda11/ccm-06-01-11.pdf

2)       Freezing employee salaries: This showed how incompetent she really is. Employee contracts are covered under collective bargaining and if arbitrarily changed would lead to a successful, expensive law suit that the city would lose.

3)      Reducing debt: The one financial ratio that Hoboken enjoys is our extremely low debt level. If she was to pay it down where would the funds come from? The surplus which she and the minority want to zero out:

http://www.hobokennj.org/docs/council/agenda11/Special_meeting_June_29_2011_Amended_Budget_Amendments.pdf

(Note the “$9”million was required reserves).

A prudent finance advisor should demand a rainy day reserve of 5-10% of the budget. This gives a municipality a cushion for unanticipated expenses. These can include (but are not limited to) tax appeals, litigation, retro pay, higher energy costs, equipment breakdowns, extra snow removal and even hurricanes.

There is also the fiscally prudent matter of asset/liability management. Assets like land, equipment, buildings or maintenance have set average useful lives. Pretend you buy a car. Do you take out a one year adjustable loan? No, most people take out a 3-5 year loan. When you buy a home is it more prudent to finance it annually or for 25 years? Many in fact did finance it annually and those people got stuck when rates rose. That Chicken Hawk strategy is why many people lost their homes.

What would have happened if the Chicken Hawks had their way? One year we had a 20 year snowstorm, then next Hurricane Irene and recently Superstorm Sandy. Each time we had to pay overtime for our public safety and maintenance personnel. We also had to incur losses from damaged property. Accordingly a Chicken Hawk created tax rise would have to been enacted. If that happened who would the Chicken Hawks blame? Why, Mayor Zimmer of course, when in fact it would have been their fiscal incompetence that caused it to occur.

Meanwhile what have Mayor Zimmer and Budget Hawks done by comparison?

Judy Tripodi in summer 2009 proposed a $61.4 million tax levy. Mayor Zimmer promptly reduced it to $60.1 million. The levy last year was below $54 million. During this time I cannot find one other town in the State of New Jersey that has lowered their tax levy each cycle without drastically reducing public safety.

As she stated in her State of the City Address, there is a sound and practical reason to maintain a 5-10% surplus. If this surplus was eliminated, Hoboken taxpayers would see a significant rise as stated above. Sandy devastated Hoboken homes and businesses as well as our public facilities and equipment.

This year she has proposed 2% further tax relief, with the tax levy declining to approximately $51 million, excluding the onetime 5% cut, that occurred during Hoboken’s Transitional Year budget. From Judy Tripodi’s 2009 budget this would result in an effective 17% tax cut. Here’s a link to an NJ.Com story of the major progress achieved by Mayor Zimmer and her Reform allies from 2012:

http://www.nj.com/hudson/index.ssf/2012/04/hoboken_city_council_approves.html

There has also been a series of revenue raises. Multimeters (now back in operation) have provided 30% more revenue, created additional parking spaces and have prevented the looting of quarters that occurred prior to Mayor Zimmer. Wait a minute Terry Castellano said “it’s been cleared up”! Recreational user fees for those who can afford it and Corner Cars (now Hertz Connect) have added $85,000 in revenue. Combined with the restructuring of the Environmental and Parking Directors Mayor Zimmer has achieved the same approximate savings as the Chicken Hawks proposed, without harming the qualifications of our Directors. With other creative revenue raisers and the streamlining of government operations Hoboken is once again leading the State of NJ is sound fiscal management.

Remember as the process continues to observe the differences between Budget Hawks and Chicken Hawks. Budget Hawks focus their time on big ticket issues and thorny problems. They can point to multimillion dollar revenue sources like Multimeters and Corner Cars. They can demonstrate and highlight multimillion spending cuts like operation audits to right size government, consolidating departments, keeping union raises to a minimum and eliminating unnecessary, often patronage jobs.

Chicken Hawks on the other hand offer small harmful cuts and fight the Budget Hawks on their efforts to raise and cut millions. But doesn’t worry, with only 8 Councilpeople, expect the Chicken Hawks to offer their pennies and crumbs and vote no on Mayor Zimmer’s 4th tax cut, which has occurred in every year since she has taken the oath of office.