The New Jersey Local Finance Board last week voted to place the town of West New York under state supervision, at the municipality’s request.
Having state oversight will allow West New York to boost property taxes beyond New Jersey’s 4% tax levy in order to meet expenses. Town officials will need to increase the taxes well beyond the 4% cap to raise $37 million of needed revenue for fiscal 2009, which ends June 30.
Earlier this year, the town approved raising property taxes by as much as 27% to gain $40.6 million of needed revenue, but $2 million of extraordinary aid from the state, deferring $1.4 million of pension contributions, and potential savings from union contract negotiations will help lower the needed tax hike.
West New York approved its $74 million fiscal 2009 budget last week and the Local Finance Board will take up the fiscal plan Wednesday. While the additional oversight does not include a state monitor, West New York will need to gain LFB approval for all borrowing needs, and the state will now review and approve collective bargaining agreements, said Department of Community Affairs spokesman Chris Donnelly.
West New York’s attorney, Daniel Horgan, said having state oversight will enable the town to move forward in a more fiscally prudent manner.
“They’ve been wonderfully cooperative with us and everybody has been informed, and we also have been very up front with our unions and our employees and with the citizens,” Horgan said.
Standard & Poor’s March 24 downgraded West New York to BB from BBB-minus, citing the lack of an approved budget for the current year. The town, which has $37.1 million of outstanding debt, remains on negative watch.