Pandemic has taken financial toll on NJ’s local governments
As New Jersey moves forward with its recovery and reopening plans, towns across the Garden State are facing mounting financial problems.
With most retail businesses closed since the middle of March and a record number of residents now unemployed because of the pandemic, Michael Darcy, the executive director of the New Jersey State League of Municipalities, said a significant number of people cannot pay the taxes that are due.
“Municipalities are being starved of revenue while they’re continuing to keep essential services moving,” he said.
He noted efforts have been made to look at moving federal COVID-19 relief money from the state to the county and local level.
With a growing number of municipalities struggling to keep essential services operating, including sanitation, health, safety and construction inspections, some have started furloughing workers for one or two days a week, which may continue for months.
Hamilton in Mercer County has made an agreement with employees earning less than $65,000 a year to have a two-day weekly furlough for the next several weeks. Part of the deal will allow them to keep their same level of health insurance and pension credits.
He said this setup allows the workers to have some kind of an income and keep medical coverage while helping the municipal budget.
“You don’t want to lay people off, have them go find other jobs and then never be able to refill those positions again because these are skilled, qualified workers we’re talking about,” he said.
Darcy said that having qualified individuals on staff is important because municipal government is service oriented.
"We don’t make widgets. We don’t produce computers and sell manufactured items,” he said. “What municipalities provide is service and service is only provided by people.”
Darcy said nobody wants to add more debt but large-scale bonding will be necessary.
“The idea is you can either close all of your services that your municipality is providing or you can borrow to keep those services going,” he said.
He noted some individuals may reject the idea of borrowing money to keep towns functioning but “if you don’t have your sewer systems in good shape, if you don’t have your building inspectors out there, your health inspectors, nobody can do business. Without municipal government, business is going to come to a grinding halt.”
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