Frank Sinatra may have done things his way, but the crooner's hometown of Hoboken, N.J., may need to suspend self-reliance for the time being and accept state-level guidance as to how best to shore up an estimated $11.7 million deficit for the current fiscal year.
City Council members Sunday night rejected, in a 5-to-4 vote, a plan to ask New Jersey's Local Finance Board to allow Hoboken to raise property taxes beyond the 4% cap imposed on municipalities to help meet over-expenditures in fiscal 2008, which ends June 30.
The City Council has yet to pass a fiscal 2008 budget and state officials have told Hoboken that it has until Friday to sign off on the roughly $102 million fiscal plan, which would include filling the $11.7 million shortfall.
Critics of Sunday night's decision say that if the city doesn't calculate the inevitable property tax hike on its own, state officials will come in and impose a higher increase than what local officials would have implemented.
"When the state comes in and sets the levy and passes a budget, they're going to do it in the most abrupt manner possible," said councilman Peter Cammarano. "They don't really care what the impact is on the taxpayer, whereas it's our job to act in the taxpayer's best interest."
Yet other members say its time for the state to step in as Mayor David Roberts and his staff have been slow to release expenditure and revenue figures for the current year after numerous requests from the council as to the exact size of the budget gap. The nine-member panel first heard the $11.7 million figure on Wednesday evening and city officials have yet to certify that amount.
"Part of the reason the council was hesitant to even discuss the cap waiver is because we didn't get documentation of everything," said councilwoman Elizabeth Mason, who favors the state coming in to look at Hoboken's books. "And the second piece is that we didn't get certification of those numbers and they kept changing. The last place you want to be is, say you set a cap at something and all of a sudden maybe [the deficit's] higher than what you've been told, and that doesn't take you to a better place."
Cammarano agrees that the Roberts administration has been difficult to work with in obtaining proper information about Hoboken's fiscal standing, yet he believes the panel should have voted in favor of asking the LFB to allow the city to tax beyond the 4% limit in order for city officials to complete the budget on their own without the state-level influence.
"I've gotten the same raw deal from the mayor's office as everyone else has in terms of requesting information and trying to act in good faith, I'm sympathetic with that," Cammarano said. "But the state is just going to come in and say, 'Give me that number,' and the administration is going to certify to it and they're going to set the levy in the fourth quarter to make up that shortfall, period. The state is not going to come in and be and act as a watchdog for the budget process that's just ending."
To address potential future deficits, Mason acknowledged that the city should bring in an outside forensic auditor, as the state's influence this year will only go so far.
"Unfortunately, what this may do is continue the problem," Mason said. "Because if you don't address some of the issues that may be systemic in the budgeting system, or in the expenditure system, or even maybe there's some issues in the collection of revenues, if you don't address those than you're just going to create the same problem."
Roberts and city business administrator Richard England did not return messages. Kathryn Kinney, a financial consultant at Donohue, Gironda and Doria, which advises Hoboken on its finances, said that city officials anticipate releasing the fiscal 2009 budget, which begins July 1, by the middle of next month so that the city has a financial blueprint to work from earlier within the fiscal timeline.
"The administration is working diligently to have this never happen again and the mayor has said that publicly and will present his budget by the 15th of July," Kinney said.
Hoboken has roughly $60 million of outstanding debt, according to Kinney. The city does not carry an underlying rating from any of the three rating agencies.
