Perth Amboy average property tax to increase $300

PERTH AMBOY — A $71.8 million municipal budget, which will increase the local tax by about $300 for the average homeowner, has been approved by city officials.

The budget was amended to include a 2.5 percent reduction in several categories for a savings of about $225,000.

But even those who recently voted for the budget are upset.

"I hate raising taxes," Council President Kenneth Balut said. "We're doing our best to get a stable budget."

Mayor Wilda Diaz said no one gets elected to raise taxes.

But since being elected mayor in 2008, Diaz inherited $10.3 million in debt because the prior administration used nonrecurring revenue to fund the budget.

Her administration also discovered an existing debt of about $250 million dating to before 2001, related to the city's water department, public safety complex, equipment and other areas that were neglected during the past two decades by the prior administration.

City officials said the debt was financed at high interest rates, with other fees attached.

"The debt started 20 years ago," Diaz said. "You have to pay down the debt. You can't continue to defer payment. You have to act responsibly."

Diaz said she has tried to do just that by paying back $30 million during the nearly three years that she has been in office. Some of the debt was refinanced.

"I'm not happy with the budget, but we have to come to the realization (that) the years of neglect have come to roost," Diaz said.

Diaz said the city would still have to raise taxes even if garbage were not picked up and the city were to lay off police officers. The city also would still have to pay health insurance and pension costs, she said.

"If we laid off everyone in the city of Perth Amboy, we'd still have to pay that debt," she said.

"The city of Perth Amboy can't get rid of $220 million," Diaz said. "I'm not worried about the next election. I'm worried about doing the right thing, and the time is now."

City Business Administrator Gregory Fehrenbach said the budget is $3.3 million lower than last year's budget, and salaries and wages also are lower than last year.

By switching last year from a fiscal year budget to a calendar year budget, Fehrenbach said the city received a one-time benefit of $1.7 million to fund the 2011 budget.

The city initially introduced a $72 million budget that called for the city tax rate to increase 12 cents, from $1.516 per $100 of assessed property value to $1.637. That resulted in a property tax increase of $330 for a home assessed at the city average of $273,000.

Fehrenbach said the city has cut expenses but doesn't have the revenue to support the budget, even with cuts of $3.1 million.

"We lost $5.3 million in state aid," he said.

In addition, there have been increases in mandated expenses such as the cost to maintain the public safety complex on New Brunswick Avenue, pension payments, and funding liabilities and obligations such as tax appeals and litigation.

"The increase is needed to create a balanced budget. The council doesn't like it and the mayor doesn't like it, but we have to maintain services," Fehrenbach said.

Councilman Fernando Gonzalez said he couldn't support the budget because he didn't feel sufficient cuts were made.

Gonzalez said the budget calls for hiring six police officers to replace retiring officers. He suggested that only two be hired, for a $195,000 savings in salary, benefits and pension.

He also suggested postponing the hiring of new firefighters, and council members cutting $5,000 from their stipend.

Gonzalez said no part-time employees, including council members, should receive health insurance.

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