ATLANTIC CITY - Mayor Lorenzo Langford introduced a budget to City Council on Wednesday that adds nearly 9 cents to the city's tax rate, but falls under the state's new 2-percent cap and does not include any further layoffs or employee furloughs.
The mayor's $223.6 million budget increased spending by nearly $7 million, which the administration blamed on more than $7.4 million in state imposed increases to pension payments, health benefits and tax appeal bonds debt service.
"I'm proud of this effort," said Langford, who noted his administration was eager to deliver City Council news that there would be only a 3-cent increase on the tax rate. But those plans were sullied when Tax Assessor Novellette Hopkins advised city leaders that there had been a $1 billion reduction in Atlantic City's property values. "That added another nickel."
Despite the additional tax rate increases, the budget's tax levy, or the amount of annual taxes to be collected, does not exceed the state's new 2-percent cap on tax collection increases. The total increase is slightly less than $7.9 million.
A full copy of the mayor's budget was not made immediately available to The Press of Atlantic City Wednesday night.
The administration's budget consultant, Arthur Bunting Jr., noted that the mayor's budget does not include any layoffs or employee furlough days. That's a stark turnaround from last year's unprecedented layoff of 60 police officers, 30 firefighters and some other city employees. Bunting said those expectations this year are contingent on ongoing union negotiations and the hope that there would be no decrease in state aid.
Figures released Wednesday by the state's Department of Community Affairs show New Jersey municipalities will receive exactly the same amount of state aid this year as they did last year.
The drastic cuts in last year's payroll came as the city attempted to fill a $9.5 million budget gap. The city eventually sought assistance from the state, which was only provided if the administration allowed certain temporary restrictions requiring state approval of hires, promotions and professional services contracts.
Bunting said the Langford budget also includes about $1 million in an operating surplus.
"That's a $10.5 million turnaround," he said.
Among the increases in state imposed costs, the city must pay an additional $4.5 million in pension payments and more than $1.3 million in additional state health benefits payments.
"Without those state imposed increases the budget would have gone down by half of a million dollars," Bunting said.
In 2009, the city expected to save $6 million by switching to the state's health benefits program, an effort to avoid a budget crisis that eventually struck in 2010. However, state commissions later voted to raise the cost of health benefits coverage, slashing expected savings.
That same year, city leaders also opted to defer pension payments. That arrangement won't truly start costing the city until next year, when the 8.5 percent interest payments begin.
City Council now has until March 11 to introduce the budget, and April 12 to adopt it.
"It's your budget," the mayor told City Council. "Any recommendations that you have, we're at your disposal."
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