Thursday, December 4, 2008

Bloomberg: Hoboken New Jersey Increases Taxes 47%

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As always, this is one of our big themes for the next 2 years ahead that we've been talking about since '07 - the crisis at the state/municipality level. We expect to see a lot of Cook Counties [Jul 2: Cook County, Chicago ---> Highest Taxes in the Nation: 10.25%] across America as services are cut, taxes are increases, and the Federal Reserve prints money so the government can push it into states. California is announcing yet another state of emergency with funding problems before next spring - we were talking about this before all the cool kids were [Dec 16 2007: California in a State of Emergency - Coming to a Theater Near You]. But Hoboken, this appears to be egregious! I've always heard New Jersey had some of the most onerous property taxes but ouch.

  • The blue property tax statement Andrew Sapira received in the mail last month from Hoboken, New Jersey, has him questioning whether the city billed as a lower-cost alternative to Manhattan is worth it. A state monitor, installed after city leaders failed to agree on a budget, ordered a 47 percent increase in property taxes for the 40,000-population community across the river from Wall Street, widely known from its portrayal as a blue-collar shipping port in the Oscar-winning 1954 film ``On the Waterfront,'' starring Marlon Brando. Payment is due today.
  • The property tax increase hits citizens at a time when New Jersey's unemployment rate is at a six-year high and with 60 percent of residents telling Quinnipiac University pollsters last month that they are financially worse off than a year ago.
  • Sapira, a 40-year-old doctor who lives in a four- bedroom brownstone on Garden Street, said his annual tax bill for city, county and school services will jump to about $21,000 from $16,000. The married father of two says he may have to move from the city he loves for its restaurants, night life and proximity to New York.
  • Hoboken, cited in a Business Week and PolicyMap.Com study in September as among communities most vulnerable to a Wall Street decline, is a favorite of young professionals. One-third of residents were 25 to 34 years old in 2000, compared with 14 percent for New Jersey, according to the city's master plan.
  • ``Businesses are having a hard enough time with the downturn; this is salt in the wounds,'' said Stephen Kilnisan, 58, who owns Traders of Babylon Fine Jewelers at First Street and Willow Avenue and will pay $4,000 more to the city this year. ``The timing couldn't have been worse,'' he said (well in theory a government should save during good times, and then have the money that was SAVED available for bad times - but in our "instant gratification" society we spend to our limit during good times and then when revenue dries up in bad times... waaah!! how could this ever happen! shocker! Who knew!? Unprecedented events have caused a shortfall.... waah!! Need a federal bailout. Waaah!! Stimulus plan please! It's all the Dems fault! No it's all the GOP's fault! Waaah! Meanwhile the electorate will continue on voting on whom they enjoy having a beer with - working like a charm.)
  • Discontent is widespread, according to Sapira. ``I blame everyone,'' he said.
  • Hoboken's finances suffered from political squabbles between the mayor and nine-member council even as the city boomed. (how can I exploit public office in my own self interest??) New Jersey's local finance board placed Hoboken under state supervision in September after the city missed a deadline for passing a budget for a seventh straight year.
  • Mayor David Roberts, a second-term Democrat whose term expires next year, said that since he took office seven years ago, taxable real estate within Hoboken's borders swelled to more than $10 billion from $2.8 billion. (so the revenue base triples and yet still a budget shortfall, imagine that...the American credo - spend every last dollar til none is left. Then look around wistfully when rainy day comes and ask "how did we get here?" I can understand this situation in Cleveland or Detroit where the taxable base is being demolished but the rest - shame on ya - you squandered your "good times" - but don't worry my unborn grandchildren await to bail you out in New Deal 2.0 in early 09 ... and latter 09... and 2010 too!) Roberts, 52, blamed the council for not amending and passing his spending plan by the start of the fiscal year.
  • ``The citizens of the city are angry at everyone; they're angry at all the bickering and the grandstanding that has taken place,'' Roberts said. ``They feel that because of all the political bickering, they're being punished. And I can't say I disagree with that.'' (stop electing people you enjoy having a beer with, instead vote for people with brains - yes the elitists - but the special type of elitists who are pragmatic and don't just have their self interest at heart. I know - it's earth shattering)
  • Councilman Peter Cammarano, 31, said Roberts allowed $10 million more in expenditures than what the council approved in the last fiscal year and provided no suggestions for closing the gap, prompting the budget stalemate. Roberts has said the spending was beyond his control. (ah so we cannot even agree on the problems! Not to mention even thinking of solutions... waaah!)
In the bigger picture I wonder if Americans will finally demand seriousness from their politicians instead of the biting, spitting and hair pulling that has marked politics since... well, as long as I remember. Instead of acting like budget unimpaired teenagers with a timeline no longer than 1 election cycle, perhaps these emergencies will spur a new era of serious politicians who are pragmatic and dare I say not so fun to have a beer with? Or... we'll just gloss it all over with new federal US paper bills created from the Treasury and say its a Black Swan event! One time only! Never again! Somehow, with our "kick the can" down the road attitude in America, I fear it's just going to be the latter.

One can only imagine how quickly many of these local and state governments would be forced into Chapter 11 if they had to run by the same rules as private enterprise.

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