Fiscal Cliff Looms as Trenton Council Slated for Budget Vote

Fiscal Cliff Looms as Council Slated for Budget Vote

Mayor ready to take action if Council misses multimillion-dollar deadline

TRENTON, NJ – Mayor Reed Gusciora said today that taxpayers are on the hook for millions of dollars if the outgoing City Council fails to pass a budget at their meeting tomorrow, Wednesday, November 23, at 5:30 p.m.

“They’ve created a fiscal cliff and they’re staring out over the ledge,” Mayor Gusciora said. “Hopefully, Council members have by now received the message from Trentonians that this sort of cavalier approach to the budget process is entirely counterproductive.”

City Council members were notified in three joint letters from the New Jersey Infrastructure Bank (I-Bank) and New Jersey Department of Environmental Protection (DEP) in July, August, and October this year regarding the severe consequences of operating without a budget.

Without a budget in place by Friday, November 25, 2022, the City would default on several agreements with the I-Bank and consequentially would:

  • Terminate access to current short-term loan accounts;
  • Forgo the opportunity to convert those loans into long-term loans;
  • Forfeit all principal forgiveness on those loans;
  • Immediately owe $35 million drawn to-date from those loans;
  • Invalidate submitted loan applications totaling $131 million; and
  • Force the City to seek higher interest rate loans elsewhere to continue ongoing projects.

City Council President Kathy McBride was reminded of those letters this week by the director of the New Jersey Department of Community Affairs’ (DCA) Division of Local Government Services, who warned again about exceeding the November 25 extended budget deadline. (Link to letter)

“Therefore, in order for Trenton to avoid defaulting on its existing obligations and maintain its ability to realize the financial benefits associated with the Water Bank, the City must adopt its budget by November 25, 2022,” Director Jacquelyn A. Suárez wrote. “Failure to do so will negatively impact the City’s residents and ratepayers and put the City in an untenable financial position by losing the significant principal forgiveness funds and special interest rates made available through the I-Bank and NJDEP’s Program.”

Gusciora said that he is prepared to sign an executive order to pass a City budget in the event the Council fails to do so, but he also intends to call a special meeting this Friday to give Council a final opportunity to fulfill their official duty and pass a budget for the year ending in December.

“I don’t think they want a legacy of driving the taxpayers off a cliff,” Gusciora said. “I certainly cannot think of a worse ending to this Council’s tenure. This would scar taxpayers for years.”

CITY OF TRENTON
2022 BUDGET TIMELINE

MARCH

APPROPRIATIONS PASSED: 22-095 Transfers made by Finance of the TY 2021 Appropriations for $2,073,000. (Pass 5-2; Vaughn and Rodriguez vote no)

APPROPRIATIONS PASSED: 22-096 Emergency Appropriations to the CY 2022 Temporary Budget for $64,655,101.28. (Pass 5-1; Vaughn votes no)

APRIL

PROPOSED BUDGET: Council passes resolution to receive Mayor Gusciora’s proposed budget with no municipal tax increase. 

BUDGET HEARINGS CANCELLED: Council President Kathy McBride refused to hold budget meetings until the City hires a “budget officer” to “explain” the proposed budget.

APPROPRIATIONS PASSED: 22-102 Emergency Appropriations to the CY 2022 Temporary Parking Utility Budget for $200,000. (Pass 7-0)

DEPARTMENT REVIEW CANCELLED: City Council leadership cancels departmental budget hearings for Law, Administration, and Public Works.

DEPARTMENT REVIEW CANCELLED: City Council leadership cancels departmental budget hearings for Finance, Municipal Court, Housing & Economic Development, and Inspections.

BUDGET DEADLINE: State law requires City Council adopt a fiscal year municipal budget by the end of April.

MAY

REQUEST FOR HEARINGS: Gusciora writes to McBride refuting her requirement for a budget officer and advising that specific questions about the budget should be communicated and the Administration will provide detailed responses. 

JUNE

APPROPRIATIONS REJECTED: 22-229 Emergency Appropriations to the CY 2022 Temporary Budget in Current Fund including Debt Service for $ $28,184,505.54. (Fail 4-3; McBride, Rodriguez, Vaughn, Wilkins vote no)

APPROPRIATIONS REJECTED: 22-245 Emergency Appropriations to the CY 2022 Temporary Utility Budgets CY 2022 in Current Fund for $19,011462.64. (Fail 4-3; McBride, Rodriguez, Vaughn, Wilkins vote no)

APPROPRIATIONS REJECTED: 22-246 Emergency resolution authorizing emergency appropriations to the CY 2022 Temporary Budgets of the City of Trenton Current Fund including Debt Service for $46,970,773.32. (Fail 4-3; McBride, Rodriguez, Vaughn, Wilkins vote no)  

EXECUTIVE ORDER: Mayor Gusciora issues Executive Order 22-04 permitting payment of City debts and continuation of uninterrupted services to residents and businesses. 

JULY

DEPARTMENT REVIEW: Council holds budget hearings for Municipal Court and Finance.

DEPARTMENT REVIEW: Council holds budget hearings for Housing & Economic Development and Inspections.

DEPARTMENT REVIEW: Council holds budget hearings for Mayor’s Office and Health & Human Services.

DEPARTMENT REVIEW: Council holds budget hearings for Water.

DEPARTMENT REVIEW: Council holds budget hearings for Clerk’s Office and Recreation.

DEPARTMENT REVIEW: Council holds budget hearings for Police and Fire.

TAX DEADLINE EXTENSION: Municipal tax deadline extended for third quarter bills. 

AUGUST

CREDIT DOWNGRADE: Moody’s downgrades City of Trenton’s bond grading following City Council refusal to pay debt service. 

SEPTEMBER

STATE INTERVENES: To allow the City to issue fourth quarter tax bills, the NJ Department of Community Affairs sends the City a letter confirming use of the tax rate from the April proposed budget to generate tax bills.

OCTOBER

BUDGET HEARING: City Council leadership scheduled, cancelled, rescheduled, and again cancelled hearings to adopt, or adopt with amendment(s), the 2022 municipal budget.

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