City nixes state aid chump change
Wednesday, September 27, 2006
By KEN THORBOURNE
JOURNAL STAFF WRITER

In a sign of fiscal health, Jersey City is taking a pass on applying for supplemental state aid, a city official said yesterday.

The deficit in the budget introduced by the City Council earlier this month is simply too small to expect the money, called Municipal Supplemental Aid, which used to be known as "Distressed Cities Aid," said Business Administrator Brian O'Reilly.

By the time the budget is adopted, O'Reilly said, he expects all the holes to be plugged with no tax increase.

"If things fall our way we'll be in good shape," O'Reilly said.

Covering July 1, 2006 to June 30, 2007, the council introduced a $422.6 million municipal operating budget earlier this month. Of that, $148.9 million is to be raised locally - up $13.9 million from last fiscal year's $135 million municipal tax levy.

O'Reilly said he's concentrating on raising revenue to fill the gap.

The city is seeking to renegotiate its payment in lieu of taxes agreements for properties owned by the Port Authority of New York and New Jersey. These payments have stood at $736,305 since 1988, he said.

Mayor Jerramiah Healy is also seeking passage of a real estate transfer tax in Trenton, which could yield another $1 million to $2 million, O'Reilly said.

The city is also selling property.

Real estate sales to the developers of the Liberty Harbor North development have already netted the city $5 million, and another $4 million is expected, he said. In addition, the city has applied for $2 million in "extraordinary aid" from the state, he said.

Cuts and PILOTS due to come on line from tax-abated properties should shave another $5 million off the deficit, he added.

Health and pension costs remain the big ticket items in this year's budget.

Pension payments, which are set by the state, shot up $8 million for the city's roughly 2,600 employees, while health insurance costs leaped $4 million, O'Reilly said.

City taxpayers are also getting socked with an additional $7.5 million in local school taxes every year until the total reaches $63 million, under a formula worked out by the state, O'Reilly said.

The City Council is expected is to pass a resolution at its meeting tonight challenging the formula, he said.

Municipal, county, and school taxes rose a total of $600 last fiscal year on a property assessed at $100,000, officials said.
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