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In Bayonne, a $15 million budget shortfall leaves Mayor Davis with just 2 months to fix the 2016 budget. Taxes are going up again.

Published On: April 23rd, 2016Categories: Tax Appeal

Just a month ago the proposed 2016 budget was done. It would have been the second year that the Davis administration managed to plug the hole in the dyke that is the City of Bayonne’s operating budget, with “just” a 2.64% tax increase. Every year, the City of Bayonne spends about $20 million dollars more than it takes in from property-taxes. That money must come from somewhere, and the City can’t bond for it.

A few weeks ago it appears real estate developer Kate Howard, LTD’s deposit payment didn’t come through for their proposed military ocean terminal development. It would seem they were attempting to re-negotiate the terms of their $15 million dollar deal with the City. On April 15 it became official, the deal was off. At Wednesday’s Council meeting, it was announced that due to the deal’s collapse the City of Bayonne’e 2016 budget has a $15 million dollar hole in it. The usual troublemakers were there to rub City Officials’ noses in it. To quote the Jersey Journal:

City BA Joe Demarco

Better days. City BA Joe Demarco at the MOT back when the deal with Kate Howard LTD was made. Now it has fallen through and the City faces a $15 million deficit with only 2 months to finalize the budget. Property taxes will go up again this year.

When Cresci pressed Malloy on where the city will find $15 million, Malloy said, visibly agitated,
“Why do you think we’re not — I hope you’re not rooting against us finding this money.”

This speaks volumes about what the Davis Administration is up against right now, politically. Remember Peter Cresci filed the lawsuit that led to Bayonne being ordered into a costly and highly unpopular revaluation. Mr. Cresci is part of the same group that has filed a petition to recall the Mayor, not even two years into office.

I know Bayonne’s Chief Financial Officer Terence Malloy from my City Hall days when I was an Assistant City Attorney. He is one of the brightest and most honest people I have ever met, and has gotten the City through many a budget shortfall over his long tenure as its CFO. However there are few, if any, places left to plug the gap this time. If the Davis administration can’t come up with any portion of it, Malloy says it will cost the average taxpayer $855 a year in tax increases. Much, much more than a 2.64% increase in a City that already has nearly the highest effective tax rate in Hudson County. The reality is they will probably find someplace to at least partially cover the shortfall. Things may get desperate, but a big part of that $15 million will probably come from somewhere. Mayor Davis better do his best, otherwise the specter of a recall election transitions instantly from pipe dream to real possibility. The wolves are circling.

There’s not much good news in the forecast as far as property taxes go in the City of Bayonne. Even if the Davis administration gets through this next year, they may regret having supported a referendum to change from an appointed school board to an elected one in the run-up to their 2014 election. Thanks to its success, Mayor Davis now has almost zero control over this board, which faces a very active teacher’s union local that wants wage increases and is motivated to fight for them. The Board will do what it does, but the Mayor will have to figure out how to pay for it.

Where is the taxpayer left in all this? Where else. Expect taxes in Bayonne to go up significantly for years to come.

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