Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Monday, October 26, 2009
Town Meeting on the State of Plainfield's Finances This Thursday, October 29 at Plainfield Library
Dear Friends,
Over the past several days, I have received many phone calls and other communications from residents concerning the state of Plainfield's finances and the management thereof. Most of these calls focused on recent revelations concerning the failure of the Robinson-Briggs administration to appoint a CFO, the duties of that office, the illegal useof an expired signature stamp on municipal checks in direct violation of state law, and the letter sent to the mayor and council from Susan Jacobucci, the Director of the Division of Local Government Services, demanding that the administration immediately stop this "improper" use of the signature stamp and appoint a CFO.
Other concerns had to do with the fact that, as of now, a budget for FY2010 has not been presented to the council for approval. The fear of a significant tax increase has been expressed by many property owners, some of whom are struggling to pay their mortgages, food bills, and increased utility (such as PMUA and water) rates.
It is against this backdrop that I have scheduled a Town Hall meeting for this coming Thursday, October 29, 2009 from 6:30 - 8:30 pm at the Plainfield Public Library*. I am offering this opportunity to hear from a broader cross-section of residents and property owners about the many concerns they have.
Although taxes may be the main subject that residents bring up, it may not be the only one. Other matters that residents have contacted me about are the lax manner in which the current road repairs are being handled, lack of progress on the Muhlenberg situation, the Senior Citizens Center and Monarch project, and the disruption of a successful voluntary sports program, the Queen City Baseball League, by unilateral moves by the Robinson-Briggs administration to establish another league under the control of the Division of Recreation.
This is another in a series of Town Hall meetings that I will be hosting to provide residents with a forum to express their views on local municipal matters. All residents are invited to attend and participate by expressing their concerns and what they would like to see the City Council do about them. In addition, elected officials wishing to stop by to hear the people's concerns are invited to do so. Please come out and let your voices be heard.
The Plainfield Library is located at 8th Street and Park Avenue and is a handicap-accessible facility. Kindly park in the 9th Street lot, if possible.
Regards,
Adrian
P.S. Look out for Part Three of "The Mayor Dropped the Ball." It will deal more specifically with the illegal conveyance of city-owned property based on the Public Land and Buildings Law.
*This meeting will take the place of my regularly scheduled Thursday office hours.
Friday, July 24, 2009
A Resounding "No!" to Tax Abatement on Monarch Condominium Project
The issue of tax abatement, in the past few days, has been raging like a wild fire out of control, and Plainfield’s elected officials have been challenged to put it out. I’ll take this opportunity to state my position on the concept of five-year tax abatements, in general, and the tax abatement pertaining to the 63 condos in particular.
During the council agenda fixing session of July 17th and the regular meeting of July 20th, I explained at great length my opposition to the PILOT (Payment In Lieu Of Taxes) application for 1272 Park Avenue, as well as my issues with the abatement application for the 63 condos on East Front Street.
In the case of 1272 Park Avenue, it is my position that the owner has enjoyed the benefit of a PILOT incentive for the past 37 years; therefore, it is now time for Plainfield to benefit from a full tax assessment on that property. The owner(s) of 1272 Park Avenue should not be allowed to profit on the backs of our fixed-income seniors and other struggling tax payers; in addition, refinancing through the NJHFA should not be used as a vehicle to guarantee lucrative profits in perpetuity.
The PILOT on 1272 Park Avenue should end and the City should collect full taxes based on the property’s assessed value. Mine was the only "NO" vote on this agenda item at the July 20th meeting.
As for the East Front Street condominium project, I told my colleagues and the public in attendance on Monday that I felt the project was a horrible one from the very beginning. It was given life by a council that was too weak to do the right thing, too concerned about self-preservation, and too eager and willing to abandon Mayor Al McWilliams in the wake of his 2005 election primary loss.
As a result, instead of moving ahead with an investment in a new senior center with commercial space that would be a guaranteed revenue stream for the City, as Al and his team had begun with a bonding process, council members at the time fell for the misguided notion that the seniors would get a center for "free" from a developer. Thus, it traded a senior center and debt service that would have been covered by a commercial revenue stream for what is now known as "The Monarch at Plainfield," with its 63 condos and all of the issues (or additional burdens) this project will bring, including additional costs for city services and education, which would be greatly exacerbated if the developer were to be allowed to have this abatement at the Plainfield taxpayers' expense.
Plainfield was let down by the previous council, which gave away prime parcels of real estate for $1 and allowed the Monarch to happen. Knowing the work that went into tearing down the properties that once stood there, and the time, costs, and effort that went into assembling the parcels of land, I felt an incredible feeling of betrayal for our seniors and for the City. It was for all of these reasons that I expressed some very strong sentiments at the last two council meetings regarding the request for abatement by the developer.
Now, I must make a confession: in spite of my very vocal opposition to this proposal, which is on the record, I fell for this past week's bait and switch hysteria that the condos could become rentals without the abatement. This was a mistake--a momentary lack in judgment that prevented me from seeing the request for what it really is--an attempt to preserve the profit margin of the developer at the expense of Plainfield’s tax payers. My hesitating "YES" vote should have been a resounding "NO!"
However, my first vote not withstanding, I knew at the time that I would have a second opportunity to make it right. Now that the public has weighed in on this firestorm, I am convinced that what I communicated to another blogger (and to numerous other residents who have contacted me over the past few days) is the right thing for me to do. That is, I will be casting a resounding "NO" vote on the second reading of the ordinance.
I know that I may face some tough critics, and I accept your criticism with humility--my feeling, though, is that a blunder corrected quickly is better than a mistake preserved with all its negative impact on Plainfield's tax base and taxpayers for years to come. Mea culpa! I said when I was elected onto the council last year that I wanted you to hold me accountable. I said I would listen to you, and I thank you for your thoughtful and passionate feedback on this issue. It is my hope that my council colleagues, too, will see this ordinance for what it is and vote "NO" as well.
P.S. In my next post, I will provide you with the true tax abatement numbers and the 5-year impact on Plainfield, meaning on you and me.
Regards, Adrian
During the council agenda fixing session of July 17th and the regular meeting of July 20th, I explained at great length my opposition to the PILOT (Payment In Lieu Of Taxes) application for 1272 Park Avenue, as well as my issues with the abatement application for the 63 condos on East Front Street.
In the case of 1272 Park Avenue, it is my position that the owner has enjoyed the benefit of a PILOT incentive for the past 37 years; therefore, it is now time for Plainfield to benefit from a full tax assessment on that property. The owner(s) of 1272 Park Avenue should not be allowed to profit on the backs of our fixed-income seniors and other struggling tax payers; in addition, refinancing through the NJHFA should not be used as a vehicle to guarantee lucrative profits in perpetuity.
The PILOT on 1272 Park Avenue should end and the City should collect full taxes based on the property’s assessed value. Mine was the only "NO" vote on this agenda item at the July 20th meeting.
As for the East Front Street condominium project, I told my colleagues and the public in attendance on Monday that I felt the project was a horrible one from the very beginning. It was given life by a council that was too weak to do the right thing, too concerned about self-preservation, and too eager and willing to abandon Mayor Al McWilliams in the wake of his 2005 election primary loss.
As a result, instead of moving ahead with an investment in a new senior center with commercial space that would be a guaranteed revenue stream for the City, as Al and his team had begun with a bonding process, council members at the time fell for the misguided notion that the seniors would get a center for "free" from a developer. Thus, it traded a senior center and debt service that would have been covered by a commercial revenue stream for what is now known as "The Monarch at Plainfield," with its 63 condos and all of the issues (or additional burdens) this project will bring, including additional costs for city services and education, which would be greatly exacerbated if the developer were to be allowed to have this abatement at the Plainfield taxpayers' expense.
Plainfield was let down by the previous council, which gave away prime parcels of real estate for $1 and allowed the Monarch to happen. Knowing the work that went into tearing down the properties that once stood there, and the time, costs, and effort that went into assembling the parcels of land, I felt an incredible feeling of betrayal for our seniors and for the City. It was for all of these reasons that I expressed some very strong sentiments at the last two council meetings regarding the request for abatement by the developer.
Now, I must make a confession: in spite of my very vocal opposition to this proposal, which is on the record, I fell for this past week's bait and switch hysteria that the condos could become rentals without the abatement. This was a mistake--a momentary lack in judgment that prevented me from seeing the request for what it really is--an attempt to preserve the profit margin of the developer at the expense of Plainfield’s tax payers. My hesitating "YES" vote should have been a resounding "NO!"
However, my first vote not withstanding, I knew at the time that I would have a second opportunity to make it right. Now that the public has weighed in on this firestorm, I am convinced that what I communicated to another blogger (and to numerous other residents who have contacted me over the past few days) is the right thing for me to do. That is, I will be casting a resounding "NO" vote on the second reading of the ordinance.
I know that I may face some tough critics, and I accept your criticism with humility--my feeling, though, is that a blunder corrected quickly is better than a mistake preserved with all its negative impact on Plainfield's tax base and taxpayers for years to come. Mea culpa! I said when I was elected onto the council last year that I wanted you to hold me accountable. I said I would listen to you, and I thank you for your thoughtful and passionate feedback on this issue. It is my hope that my council colleagues, too, will see this ordinance for what it is and vote "NO" as well.
P.S. In my next post, I will provide you with the true tax abatement numbers and the 5-year impact on Plainfield, meaning on you and me.
Regards, Adrian
Thursday, February 19, 2009
Passing the Budget: Between a Rock and a Hard Place
Of the 51 municipalities in the state of New Jersey operating on a fiscal year (July 1st – June 30th), only seven have already passed their budgets as of last week; the others are awaiting a decision on the pension deferral legislation and extraordinary aid. The reason most, if not all, the other 44 municipalities have not adopted their budgets is because they all have levy cap problems, and municipalities with levy cap problems have to apply to the Local Finance Board (LFB) for a waiver. If a waiver is not granted, municipalities would have to reduce their budgets by the amount by which the budget exceeds the levy cap. In the case of Plainfield, that number is just over $3 million. Currently, the LFB will not hear any applications for waivers until a decision is made on the pension deferral legislation and on extraordinary aid.
Mayor Sharon Robinson-Briggs has been urging the council to accept the 50% pension deferral, suggesting that this is the only feasible way to ease the property tax burden on our residents. This "urging" is misplaced, however, because based on the way the legislation is currently written, municipalities will not have a choice to defer or not to defer--deferral will be mandatory.
Mayor Sharon Robinson-Briggs has been urging the council to accept the 50% pension deferral, suggesting that this is the only feasible way to ease the property tax burden on our residents. This "urging" is misplaced, however, because based on the way the legislation is currently written, municipalities will not have a choice to defer or not to defer--deferral will be mandatory.
A 50% deferral for Plainfield will equate to $2.7 million, leaving Plainfield with a need for approximately $300,000 to get below the levy cap and avoid the need to go before the LFB for a waiver. It is likely that Plainfield will receive extraordinary aid to the tune of at least $300,000.
So, as it stands, Plainfield and other municipalities are between a rock and a hard place: they are over the levy cap and they need a waiver from the LFB. They can’t get a hearing for a waiver from the LFB because of the pending pension deferral legislation and a decision on extraordinary aid. Therefore, Plainfield cannot adopt its budget in its present form; the budget would have to be cut by a minimum of the amount by which it exceeds the levy cap, which is just over $3 million.
Between a rock and a hard place is not a good place to be, especially in these harsh economic times. However, tough times call for tough decisions and tough love.
So, as it stands, Plainfield and other municipalities are between a rock and a hard place: they are over the levy cap and they need a waiver from the LFB. They can’t get a hearing for a waiver from the LFB because of the pending pension deferral legislation and a decision on extraordinary aid. Therefore, Plainfield cannot adopt its budget in its present form; the budget would have to be cut by a minimum of the amount by which it exceeds the levy cap, which is just over $3 million.
Between a rock and a hard place is not a good place to be, especially in these harsh economic times. However, tough times call for tough decisions and tough love.
It’s time for the mayor and council to make the tough decisions.
Regards,
Adrian
Regards,
Adrian
Saturday, December 6, 2008
Reporting on the 93rd Annual NJLM Convention
I was very intrigued by some of the seminars given at this year’s New Jersey League of Municipalities convention, which I attended in my capacity as Chief Financial Officer for the Borough of Roselle. The seminars dealing with financial issues and “greening” New Jersey were of particular interest to me, but in this post I will focus on things financial.
Oftentimes, governmental entities and non-profit organizations, e.g., hospitals and churches, seem to take the view that any property they own is exempt from taxes. Municipalities have for years given into this unlawful ownership theory, thus foregoing tax revenues to which the municipalities may be entitled. But one of the things made very clear in the seminar titled “Property tax exemption in New Jersey, issues and answers,” is the fact that tax exemption is not based on ownership but is based on use. So, properties owned by non-profits, school districts, and other governmental entities can be taxed depending on the uses to which they are put. There are four basic theories that determine whether or not a property is exempt from taxation, regardless of ownership: 1) Tax Base Theory, 2) Benefit Theory, 3) Sovereign Theory and 4) Community Theory.*
This seminar also touched on the different types of programs and incentives municipalities can use in an effort to spur economic development, i.e., Redevelopment Area Bonds or "RABs" (also known as Tax Increment Financing or "TIF"), Redevelopment Allocation Districts, and five-year tax abatements, an incentive program I discussed during my recent campaign for the city council.
Another seminar of note was the one sponsored by the State Comptroller that dealt with the need for Accountability, Transparency and Efficiency in government. This topic was one of the themes of my recent campaign. Matthew Boxer, the State Comptroller, is proposing that municipalities rotate auditing firms every 10 years. His office is currently working on developing a template that municipalities would be required to use in soliciting quotes for auditing firms. I asked the Comptroller if his office had any plans to try and identify those responsible for the disappearance of billions of dollars in school construction funds. He responding by saying that his office was looking forward, not backward, and that it would be up to the State Attorney General’s office to pursue the matter of the disappearance of school construction dollars. Given the recent court ruling regarding the Abbott funding formula, I believe it is imperative that the AG follow up on this.
All in all, the convention was very informative and packed with several interesting seminars. It was a worthwhile learning experience.
Regards,
Adrian
*NOTE: I will discuss these theories and how they impact the municipalities I serve in more detail in a future post.
Oftentimes, governmental entities and non-profit organizations, e.g., hospitals and churches, seem to take the view that any property they own is exempt from taxes. Municipalities have for years given into this unlawful ownership theory, thus foregoing tax revenues to which the municipalities may be entitled. But one of the things made very clear in the seminar titled “Property tax exemption in New Jersey, issues and answers,” is the fact that tax exemption is not based on ownership but is based on use. So, properties owned by non-profits, school districts, and other governmental entities can be taxed depending on the uses to which they are put. There are four basic theories that determine whether or not a property is exempt from taxation, regardless of ownership: 1) Tax Base Theory, 2) Benefit Theory, 3) Sovereign Theory and 4) Community Theory.*
This seminar also touched on the different types of programs and incentives municipalities can use in an effort to spur economic development, i.e., Redevelopment Area Bonds or "RABs" (also known as Tax Increment Financing or "TIF"), Redevelopment Allocation Districts, and five-year tax abatements, an incentive program I discussed during my recent campaign for the city council.
Another seminar of note was the one sponsored by the State Comptroller that dealt with the need for Accountability, Transparency and Efficiency in government. This topic was one of the themes of my recent campaign. Matthew Boxer, the State Comptroller, is proposing that municipalities rotate auditing firms every 10 years. His office is currently working on developing a template that municipalities would be required to use in soliciting quotes for auditing firms. I asked the Comptroller if his office had any plans to try and identify those responsible for the disappearance of billions of dollars in school construction funds. He responding by saying that his office was looking forward, not backward, and that it would be up to the State Attorney General’s office to pursue the matter of the disappearance of school construction dollars. Given the recent court ruling regarding the Abbott funding formula, I believe it is imperative that the AG follow up on this.
All in all, the convention was very informative and packed with several interesting seminars. It was a worthwhile learning experience.
Regards,
Adrian
*NOTE: I will discuss these theories and how they impact the municipalities I serve in more detail in a future post.
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