Dear Neighbors,
I hope you enjoyed the Holiday weekend with your families or close friends. At Wednesday’s City Council meeting, Mayor Bhalla will introduce to the Council the municipal budget which introduction has been delayed by State guidance related to COVID-19 issues that have profoundly impacted State, County, and municipal budget forecasting. I want to provide you with this Special Budget Newsletter to bring you up to speed on important issues concerning the introduction of our Municipal Budget.
Budget Update — Tackling our Projected Fiscal Shortfall and Narrowing the Budget Gap
On June 24, the City Council hosted a special meeting to discuss the latest on tackling Hoboken’s anticipated budget shortfall for the Fiscal Year 2020. Unfortunately, COVID-19 has made a significant impact on this year’s budget. COVID-19 directly resulted in increased expenses (like COVID-19 testing, Senior Meal deliveries, and front line worker overtime, for example), along with the suspension of normal Hoboken Parking Utility activities and Municipal Court activities (by way of example), which resulted in major revenue losses. This is notable because this additional revenue loss (in the millions of dollars), as opposed to COVID-19 expenses, is not reimbursable unless the Congress and the President pass an additional stimulus bill to provide aid to states and municipalities, which has not happened yet. This is on top of a very difficult budget year for the City, which is suffering from a rise in fixed costs including a rise in pension costs, higher than anticipated healthcare premiums, and additional losses in revenue from municipal court, parking, and more.
So, on top of the originally projected shortfall due to fixed costs, these additional expenses and revenue hits due to COVID-19 ballooned Hoboken’s municipal budget to $19.8 million.
In response to this huge budgetary challenge, Mayor Bhalla’s Administration, working with members of the City’s Budget and Finance Committee, on which I serve, has worked hard to reduce costs to minimize the impact of these shocks on the taxpayer. Specifically, the City cut discretionary spending in the Mayor’s office, the Business Administrator's office, the Engineering office, and outside spend for Legal Fees (down 7% since 2016), made over $1 million in cuts to departmental spending, saved $3 million from reduced healthcare appropriations by approximately, made reductions in contract settlements, and reduced city staff. On the positive side of the ledger, Mayor Bhalla’s Administration received $1.49 million under the CARES act for COVID-19 expenses incurred between March 1st and April 30th in the first round of four allocations of funds received from Hudson County in response to a thorough and well-documented submission provided to the County by the City. With these reductions in expenses and funds allocated to Hoboken by the federal government, Hoboken’s remaining budget gap was narrowed by $10.9 million to $8.9 million. 
The City proposes using $3.3 million of the City’s surplus to further reduce the budget gap down to $5.5 million.
A $5.5 million municipal budget gap in this fiscal year would translate into an overall 1.4 percent tax increase on the tax bill for the Hoboken taxpayer. This would amount to the equivalent of an annual increase of $115 for the average Hoboken property owner.
Issuing A Library Bond This Year Will Help Us With Regenerating Budget Surpluses In Future Fiscal Years
The City has been presented with an opportunity to make our budget picture more sustainable in future years when the Board of Trustees of the Hoboken Library offered to transfer $4.6 million from the Library’s operating account to the City. The City, in turn, would bond $4.6 million for future rehabilitation and construction expenses for the Library, as the Library does not have the authority to bond for capital expenditures, but the City does. The City could then apply that $4.6 million to responsibly replenish our regenerating surplus to more sustainable levels (including restoring the $3.3 million to be drawn down this fiscal year) allowing us to follow best practices and maintain a more healthy surplus level, protecting Hoboken taxpayers from future municipal budget shocks.
I voted in favor of issuing this Library Bond on first reading at our meeting on June 24, and hope my Council Colleagues join me later this month at the July 29th Council meeting and support issuing this bond to help responsibly administer our budget in these uncertain times for our City’s long-term fiscal well-being. We are extremely fortunate to have the library assist us during this unprecedented time, and this additional funding will help reduce the budget impact and reduce the overall tax bill for Hoboken residents.
Upcoming Budget Committee Hearings: Next Steps for Hoboken’s Budget
After Mayor Bhalla’s Administration introduces the budget to the Council at the July 8 meeting, public budget hearings will follow, hosted by the Budget and Finance Committee, on which I serve. Our Budget hearings will likely be held in the latter half of July and early August, before the City Council votes on a final municipal budget, likely at the Council’s August 19 Council meeting.
As always, if you’d like to reach out with any questions or concerns at any time, or if I can be of any assistance to you or to your family, do not hesitate to contact me at HobokenPhil@gmail.com
Stay safe!
Phil Cohen
5th Ward Councilman
City of Hoboken, New Jersey
HobokenPhil@gmail.com
(862) 234-9053
P.S. You can learn more about me and my ideas for Hoboken on my website,
