ATLANTIC CITY — Without transitional aid, city taxpayers will see a 47 percent local tax increase, Mayor Don Guardian said as he introduced the 2014 budget Wednesday.
In January, “I said Atlantic City needs a root canal,” Guardian said as he began his State of the City address in Council Chambers. “Tonight, I bring you that root canal.”
The $262 million budget carries a 65-cent municipal tax-rate increase per $100 of assessed value, or an additional $1,489 for the owner of a home with the average assessment of $229,000. That does not include school, county or other taxes.
Of the rate increase, 61 cents is directly related to decreased property values, the mayor said.
The tax rate does not include $20 million in transitional aid the city will apply for Friday. That money — which has to be approved by the state Department of Community Affairs — is not guaranteed.
The increase would go down to about 45 cents if the entire amount is approved, council was told. Revenue and Finance Director Mike Stinson said a penny on the tax rate represents about $1 million to $1.1 million.
City Councilman Mo Delgado was the sole vote against applying for the aid.
Guardian said plans for shared services along with recommendations by union leaders could save $15 million to $20 million annually within four years.
He also is in talks with casinos to garner promises that they will not appeal their property taxes this year or next year. But, he reiterated, a decision needs to be made on how to fairly assess these properties, which have been awarded millions in successful tax appeals.
Citywide property revaluations are also planned.
Layoffs are not off the table, according to discussions following the budget introduction.
“It’s the S and W, salary and wages,” said Councilman Tim Mancuso, the first to bring up layoffs.
“Public safety is our largest expense,” he said. “We’re going to have to face that.”
Every position throughout the city is being evaluated to weed out those considered unnecessary, Business Administrator Arch Liston said.
“Councilman Mancuso is absolutely correct,” he said. “Salaries and wages are your highest dollars spent.”
Since Guardian took office, 22 vacated police positions have not been refilled, and there have been no promotions, Liston noted. The city is also looking at restructuring the Police Department to put more officers on the street and see whether some desk staffing can be done by civilian workers.
The Staffing for Adequate Fire and Emergency Response grant that allowed the city to keep 51 firefighters limits what can been done with the Fire Department, he said. But the DCA — which currently has financial oversight of the city — has an expert who will be evaluating that staffing.
Also discussed was that job losses can increase crime, making police even more important.
“We can’t defeat crime if you’re going to be laying people off,” local NAACP President Linda Steele said.
The budget is about $5.5 million more than last year’s, Guardian said. But, he noted, the city ended last year overspending by $10 million, meaning this budget is actually smaller.
Many ideas were thrown around to try to help the city make money — even marijuana.
“I never thought I would be saying this in a million years,” Councilman Frank Gilliam said as he brought up places such as Denver, which decriminalized the drug.
Too much money is spent to fight crimes that shouldn’t be fought when there are bigger problems, he said.
Councilmen also brought up the fact that Atlantic City does not benefit from a room tax.
“Absecon gets a room tax,” Liston said. “Galloway gets a room tax. There’s no reason we shouldn’t get the room tax.”
“If people stay here, we should benefit from it,” council President Speedy Marsh said.
The idea of shared services also raised some concerns.
Delgado said the city needs to show how much it adds to the county and the state.
“They take from Atlantic City, and there’s no investment back in,” he said. “We’re at the end of the game. The party’s over, and nobody wants to stay and help clean.”
Then he questioned whether it was “a strategic thing to put casinos up in North Jersey.”
Councilman George Tibbitt said some of those possible partners may be places “that have not always had the best interest of the people of Atlantic City at heart.”
He requested that, when these proposals are brought to council, Guardian point out where the savings are and confirm the money doesn’t come off the municipal tax just to be added to the county tax bill.
“This is not the blame of any one person,” the mayor said of the city’s dire financial situation. “This is the reality of the last 20 or 30 years.”
Last year’s tax rate was $1.385 per $100 of assessed property value, a 22 percent increase over 2012. That was a few cents cheaper than the introduced budget, which hadn’t included $5 million in federal funds to cover revenue lost during Hurricane Sandy.
Council accepted the budget by a vote of 7-1, with Mancuso voting no. Councilman Rizwan Malik had temporarily left the room before the vote.
The vote does not pass the budget, which is still preliminary, but accepts the introduction.
A meeting on the 2014 budget will be held in council chambers April 10, when department heads will show their budgets and present their cost savings.
Council also voted on more than $850,000 in payouts to five recently retired members of the Police and Fire departments. Four will be paid in a lump sum, while one will be paid out over three years, at the retiree’s request, Stinson said.
The payouts passed 8-0. Mancuso was out of the room when the votes were made.
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