Mayor Andre Sayegh is proud to announce the Local Finance Board has unanimously supported Paterson’s reversion to a calendar year, which means the city’s fiscal year will now be based on a calendar year (January-December) instead of the July-June fiscal year.

The city will operate under a transition period – July-December Transition Year (TY20) – before establishing the new calendar year (CY21) as of January 2021.

This process to change from fiscal to calendar presents benefits directly to residents as well as the overall budget of the city.

Benefits of Fiscal Year Reversion to Residents

• Ability to create one tax bill/mailing from a set tax levy.
  • During the transition, we will send one bill in August and one in November, but will be able to switch to once-a-year mailings as of Summer 2021.
  • This means that residents will have further clarity on their bills and will be able to compare them year-to-year instead of some quarters within the same fiscal year being different amounts.

Potential of Surplus and Reduction of Reliance on Transitional Aid

• The first 6 months – July to December – is the transition year, or TY20, and during this time Paterson will receive our standard “state aid” amount, which is a combination of numerous funds from CMPTRA to energy receipts and totals about $30+M.  During the same time, the City does not incur its largest expense, contributions to the state pension fund. Therefore, the city’s revenue is expected to exceed expenses, allowing Paterson to create a small surplus, and in turn, a reserve fund.
• Then during the January to December calendar year, or CY21, the city will receive the same amount of state aid ($30+M) and will also be able to apply for Transitional Aid (approx. $20M).  These funds will help us cover all the expected annual expenses.
• The reserve fund will assist with covering expenses we would normally have to absorb completely in the operating fund, such as retirement payouts.  This will allow us to continue on our current path of reducing our reliance on transitional aid for our operating budget and returning to full local control.

“This reversion is something I wanted when I was a councilman 5 years ago to create budgetary breathing room for Paterson, and I am grateful for the support of the city council throughout this process this year,” said Mayor Andre Sayegh. “Although it took 5 years, I am glad that today the local finance board has unanimously approved it and we are able to move forward.”

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