$73.2M city budget; $51M school budget

$73.2M city budget; $51M school budget
One up for Wednesday public hearing, other up for public voteĀ 

Hoboken Reporter, 04/02/2006

Hoboken residents will be able to speak at Wednesday's City Council meeting on the proposed $73.2 million Hoboken city budget, and they will be able to vote on April 18 on the recently approved $51.2 million school budget.

Both budgets figure into residents' property tax payments, along with the county budget to be struck in June.

On April 18, voters will have the opportunity to select three members of the school board and to accept or reject the school budget, which uses just over $32.9 million in local taxes. The school budget anticipates that the district will receive $13 million in state aid and around $3.3 million federal aid.

The school budget is up $1.3 million from last year's $49.9 million budget, but the resulting tax rate should remain level at around $11.75 per $1,000 worth of assessed property because new taxable property came on line this year, according to school officials. As for the $73.2 million city budget, see sidebar.

School budget affects everyone

In Hoboken, voter turnout in school board elections is usually tepid, at around 6 to 8 percent of registered voters. Some residents without school-age children don't believe they have a vested interest in the Board of Education, but everyone who rents or owns property pays property taxes.

At City Council meetings, residents often line up to criticize government spending, but at the Board of Education, residents rarely debate the budget. At this past Thursday's school budget hearing, only two residents commented.

However, local tax payers pay much more in local taxes to the Board of Education than to the city.

While local taxpayers only pay around $24 million annually into the municipal government, the school board is asking for a tax levy $32.9 million. And unlike the City Council's budget, which is approved by the governing body, the school board's budget is directly voted on every year by the public.

If the budget is voted down, it goes to the City Council, which will then have to authority to review it and make more cuts.

But some say it is important to approve the budget to keep necessary school programs. The high school already has lost programs in home economics and other industries, as well as the marching band program.

2,175 kids in public schools

Educating children in Hoboken is an expensive endeavor. According to the proposed budget, the district is anticipating 2,175 students next year (not including the two public charter schools). If that number is divided by $51.2 million, which is the total amount of spending minus the money that is given the charter schools, it costs an average of nearly $22,000 to educate each public school student.

However, that includes amounts for transportation and special education programs that are covered by federal and state grants.

Yet, even the anticipated number of students has been questioned by some observers. Anticipating 2,175 students means an increase of 311 over those enrolled on Oct. 15, 2005.Since the district has had declining enrollment for the past two decades, a 311 increase in a single year might be overly optimistic.

Public v. private

So how does the cost of public education in Hoboken compare to the private sector? Just for comparison's sake, the tuition at the Hudson School in Hoboken, which is one of the more respected local private schools, is $11,200. But private schools are free from some spending constraints that public schools have to endure.

Because Hoboken had several decades of declining enrollment, school officials have been able to hire very few new teachers. This means there are an unusually high number of teachers with over 25 years of experience.

"The present staff has an inordinate percentage of upper-end salary personnel (95 percent at maximum) with the average teacher with 26-years experience," reads the new budget's narrative statement.

The average Hoboken teacher still earns around $70,000 per year, which is higher than the state average of about $50,000.

The district has taken steps to remedy this situation over the past several years. They have offered a teacher buyout package, and in the last couple years there has been an infusion of new teachers, especially at the high school.

The district also has the highest administrative costs in the county, because of administrators with many years of work.

The school's budget statement also notes that the district has made a "commitment to provide small class size" and to a "challenging high school curriculum including the International Baccalaureate Program."

According to the budget, $3.8 million is allocated to fund the city's two charter schools.

At the last minute

This year's school budget is already late. The administration, which writes the budget, only submitted the final budget to the Board of Education Trustees last week. That meant that the board members had about 48 hours to review this sizable document.

On Thursday night, in only about an hour-long period, the board members slashed $1.08 million from the budget. But given so little time, there is a question of whether they could have cut more, or even if they cut the right items.

Also, Superintendent of Schools Patrick Gagliardi was not at the meeting to answer questions from the public. According to school officials, he was out of town on school business.

MONEY MATTERS - The Hoboken Board of Education voted Thursday to send its $51.2 million budget to the voters.

City budget will have small tax increase

On Wednesday night the Hoboken City Council is scheduled to hold a budget hearing for its $73.2 million budget. The budget is up from last year, when the city spent $70.9 million.

Because the budget contains several million dollars worth of deferred charges, which are budget items that were paid for last year but had to be included in this year's budget, Mayor David Roberts says that the operational spending increase in this year's budget is only about 2 percent, although that number is contested.

Critics of the administration charge that the increase in spending is much greater.

The tax levy in this budget increases to $24.3 million, which according to Roberts, will represent about a 3 percent increase in the municipal portion of the tax levy. This is the first tax increase in city taxes in the past decade, said Roberts.

The biggest items in the budget are salaries, especially those in the fire and police departments. The budget anticipates that Hoboken police officers will earn $13.9 million in 2006, which is up about $1.9 million from the previous year. Firefighters will make $11.9 million this fiscal year, which is about a $400,000 increase.

There is some good news in this budget. The city has decreased it structural deficit from $18.5 million to $7 million in a single year. A structural deficit is when the city's reoccurring revenues are not enough to match what the city is spending. To close the gap the city has had to develop one-shot revenues to fill the budget hole.

This year, the most controversial one-shot revenue is the plan to sell the city's municipal garage to a redeveloper. The city hopes to reap at least $5 million from the sale (see story page 9).

Another controversial aspect of this budget is the increased reliance on Payments in Lieu of Taxes (PILOTs). Under these deals developers pay a set amount of money each year instead of paying conventional taxes. But instead of splitting that money between the city, schools and county, the city gets to keep almost all of it.

Roberts believes that PILOTs are an excellent way to provide municipal tax relief. He said that in 1990 the city realized only $2 million in PILOTs, but this year it will receive over $10 million.

But not everyone agrees with the city's policy of liberally giving out PILOTs. Critics say that someone has pick up the tab that doesn't go to the county and schools.

Copies of the budget are available on-line at www.hobokennj.org and in the City Clerk's office at City Hall. The public will also have an opportunity to speak on the budget on Wednesday at 7 p.m. at City Hall.

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