East Orange Mayor says, No Tax Increase

Wednesday, October 18, 2006

By Patrick Justin Fahey, Staff Writer

EAST ORANGE, NJ - In a speech before the East Orange City Council, Mayor Robert L. Bowser touted highlights as he presented the city’s budget for the 2007 fiscal year.

Bowser said some highlights of the budget are an anticipated surplus of $4.5 million, a $1 million increase from last year’s surplus, and no tax increase.

“I am proud to report tonight that this budget, once again,” Bowser said to applause, “does not reflect a tax increase to our citizens. I repeat, no tax increase!”

Bowser outlined the steps that were taken to create a budget keeping taxes steady and increasing the surplus.

“In order to get to this point, we went through many steps. I directed all department heads in preparation for their first submission to reduce their individual budgets by about 2½ percent, then the Essex County tax rate numbers came out,” said Bowser. “The department heads redid their numbers, then the figures from the state arrived and the entire budget had to be reconfigured. What you have here is a recalculated budget almost four times, especially when we knew the ultimate goal was not to increase taxes to our taxpayers.”

Bowser noted the budget only covers municipal expenses. The county and school tax rates are controlled by separate boards.

Bowser also pointed to some of the difficulties that had to be dealt with during the budget process. He said they included an additional payment of $2.3 million to the police and fire  pension fund, a cost that formerly was covered by the state.

The city also lost $900,000 in state extraordinary aid because “we’re doing so well.” In addition, the U.S. Department of Housing and Urban Development cut Community Development Block Grant funds to East Orange by 9 percent. Bowser said CDBG grants for East Orange have been cut 30 percent since 2000.

Bowser also cited fuel-cost increases, which have gone up 30 percent during previous years.

“And don’t think because they went down last week they’re low. We plan for the entire year,” said Bowser.

Bowser said insurance and health benefits for city employees have increased $600,000 and money was set aside for union negotiations. Bowser indicated all union contracts expire on June 30, 2007. He also talked about certain costs that are “pass-through” costs, such as the Urban Enterprise Zone of $640,000, balance housing and shelter, plus care, $1.6 million.

Bowser pointed out more reasons for a positive fiscal outlook for East Orange.

“The East Orange Water Commission, for many years, was operating at a deficit when we had interlocal agreements. The city had to cover those deficits through the city’s operating budget,” said Bowser. “For the past two years, the water commission has been on firm ground and this budget reflects some repayment of those funds.”

The mayor also talked about the city’s reputation in Trenton. “The city of East Orange enjoys a position of respect in Trenton and across the state of New Jersey on how we handle our fiscal affairs,” Bowser said. He noted the city’s “graduation from the Distressed Cities Program,” redevelopment and economic growth, planned housing and first-time homebuyers program as reasons the city is held in such esteem.

When Bowser’s speech was complete, Councilwoman Mary Patterson moved to put the budget on next week’s consent agenda. The motion was passed unanimously.

If the council votes to accept the budget on Monday as expected, it begin the review process. Once the process is completed and changes are made that may be deemed necessary, the budget can be adopted by council members and become official.