Hoboken Municipal Budget To Switch To Calendar Year

The City of Hoboken will switch from a fiscal year calendar (which runs from July 1 to June 30) to a regular year calendar, starting Jan. 1 2011.

A six-month transition budget has been drafted for the last six months of 2010. 

Although some members of the public at Wednesday evening's council meeting described the measure as a "gimmick" and even as a campaign move, the city's financial guys say it's a good idea. 

Former Finance Director Nick Trasente attended the meeting to help explain the new calendar, and what it means to Hoboken tax payers. 

If the City's municipal budget moves to a calendar year, the city will receive the entire sum of state aide—which will be $11.1 million—in the coming six months. This money will be used to pay off one-time expenses, such as a $4.2 million penalty the city owes the state. If the city wouldn't move to a calendar year, it would receive half of the state aid allocated to Hoboken in the next six months. 

Although it's still unclear how much state aide Hoboken will receive next year (that money will come to the city in the second half of 2011), it's highly likely to be less.

The measure would also provide some tax relief for Hoboken residents, said Steven Wielkotz, who served as the City's auditor and came to Wednesday's meeting to urge the council to make the move.

Switching to a calendar fiscal year will also mean that Hoboken tax payers will receive one tax bill a year—rather than two—and that the tax rate can be established. Currently there is no bill that coincides with the tax rate, said Tresante. In a fiscal year town, he explained, the bill is always estimated.

Moving to a calendar year also reduces the risk that your taxes will be significantly higher in the second part of the year, Tresante explained.

Basically, said Wielkotz, it provides the city with the chance to pay one-shot expenses in the coming six months and provide a little bit of tax relief for Hobokenites. He also said that it'll be easier for residents if they only receive one tax bill a year. 

The one-shot revenue will be used for one-shot expenses, said Fourth Ward Councilman Michael Lenz. "It's responsible," he said, "it's the right thing to do."

Some council members proposed that the transition be made in 2012, in order not to rush into a 6-month transitional budget immediately. 

"Now is the time to do it," said Trasente.  

First Ward Councilwoman Theresa Castellano said she had a problem with "rushing" into the new calendar. "The council should have more time."

Council President Peter Cunningham said that he wants to instate a reserve fund policy, in which a percentage of the budget is saved as cash "for a rainy day event."

Mayor Dawn Zimmer will travel to Trenton in June, to ask the Local Finance Board to switch Hoboken to a calendar year.