Property owners in Hudson County pay taxes that go to three entities: Their city, their school budget, and the county budget, which is struck each June.
Jersey City taxpayers will see what is being called "the perfect storm" since in that town, they are also seeing an 18 percent rise in municipal taxes in 2006 and a reduction of $7.5 million in state aid to their schools.
Bayonne, Secaucus, Harrison, Hoboken, East Newark, Guttenberg and Weehawken will see a reduction in county taxes, while Jersey City, North Bergen, Union City, West New York and Kearny will see increases.
The proposed budget resulted in a battle among the Freeholder Board on May 11, as Jersey City Freeholders Bill O'Dea and Jeff Dublin led a movement to delay the budget's introduction until an audit of county spending could be started. They hoped that the projected 9 percent county tax increase to Jersey City could be eliminated or reduced.
A meat-and-potatoes budget
County spending rose from $370.6 million in 2005 to a projected $396.7 million this year.
County Executive Tom DeGise called this "a meat-and-potatoes" budget, free from gimmicks. He said most of the spending increase was covered by increased tax ratables, or new taxpaying properties, in the county. That way, more taxpayers are sharing the load.
The county needed to raise only $10 million in additional taxes to cover the $26.1 million spending hike.
What each town pays depends on how much taxpaying property is on the roster. But unlike municipal taxes, which are based on an assessed value that does not change dramatically from year to year, county taxes must be based on the actual value of property as calculated by the sale of property within a municipality.
Jersey City's housing sold at a significantly higher rate last year, pushing up its obligation to the county, said County Executive Tom DeGise.
At the May 11 freeholders' meeting, Jersey City Mayor Jerramiah Healy appeared to protest the fact that Jersey City taxpayers would be paying $9 million of the projected spending increase.
"This will mean another $140 to $150 (yearly) to the average Jersey City taxpayer," Healy said.
And that's not including the taxes that Healy is raising himself.
DeGise said, "At times, this is frustrating for municipalities that are growing rapidly and bearing a greater share of the cost as a result." He supports the call for the state to reform its property tax system. "We have begun a dialogue with Trenton," he said, "about how it should effectively hold harmless successful urban municipalities like are ours that are penalized for their success under the current tax system."
DeGise said, regarding his disagreement with Healy, "Jerry and I are still friends. But sometimes even friends have disagreements."
Reasons for more spending
DeGise said that unlike the federal government, which can borrow freely to cover its cost, "We must pay as we go, and so we continue to do all we can to control spending, pay down debt and seek new and more productive management approaches."
DeGise said this year's spending increases were due to rising health care costs, pension obligations and other statutory expenses, all of which rose by double digits.
"The obligations driving this increase were unavoidable," DeGise said. "[Health care] costs rose by 10.9 percent in just the last year alone."
Pension payouts increased by 20 percent.
But DeGise acknowledged the county's obligation to cut costs, and for that reason senior staff will not get cost-of-living increases in 2006, he said.
DeGise has urged the leadership of the community college, vocational school and Hudson County Improvement Authority to do the same.
Auditing county departments
DeGise said the county recently awarded a contract for a management review of all major county functions, including the adult correctional facility, welfare, and Buildings and Grounds departments.
"In the days ahead, this new, non-political team will offer us new insights on how we can be more efficient and hopefully more cost effective," DeGise said.
The county is also reducing its dependence on leased properties for housing department offices with the newly acquired county government center on Corelieson Avenue.
DeGise also said the county continues to hunt down state and federal grants, estimating the county will receive about $40 million in grants this year. He also noted a savings of $1.5 million as a result of the state assuming the cost of the county prosecutor's office again this year.
Once the actual budget is introduced, the freeholder board will look at the budget for areas to cut. This will include a public hearing at some point in June.
"This is the beginning of the process," O'Dea said. Senior Staff Writer Al Sullivan can be reached at email@example.com.