A Tale of Two Budgets

The New Jersey Local Finance Board last week approved fiscal 2009 budgets for the city of Hoboken and the town of West New York. Both municipalities are under state supervision for failing to pass balanced operating budgets in a timely manner.

LFB officials approved a $124.3 million fiscal 2009 budget for Hoboken. West New York’s fiscal 2009 budget is $73.1 million, according to Daniel Horgan, the town’s attorney. Fiscal 2010 will begin July 1 for both jurisdictions.

Hoboken and West New York will also defer pension contributions to help bring expenditures in line with revenue. The state last month approved a one-time pension-deferral initiative that allows municipalities to postpone 50% of their pension contributions this year.

Hoboken will pay $3.2 million less while West New York will decrease its pension contribution by $1.4 million, according to the LFB.

Hoboken has been under state oversight, including the use of a state monitor, since September. The LFB placed West New York under state supervision earlier this month. The town does not have a state monitor, but the LFB will review collective bargaining agreements and other contracts. Both municipalities must go before the LFB for approval of all borrowing.

Hoboken has $60 million of outstanding debt and does not carry any underlying ratings. Standard & Poor’s last month dropped West New York to BB from BBB-minus due to the lack of an approved fiscal 2009 budget. The town has $37.1 million of outstanding debt.

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