Paterson council rejects budget introduction tied to 5.6% tax increase; members press administration for alternatives

The Paterson City Council on May 13 voted down the administration’s proposed introduction of the calendar-year 2025 municipal budget after heated debate over assumptions the document used about state transitional aid and a planned 5.6% municipal tax increase.

The votes on resolution item 11 were 3 in favor, 5 against and 1 absent, and the resolution failed.

Council members said the introduced budget relied on uncertain state aid and did not include a credible fallback plan. Councilmember concerns focused on the size of projected increases in salaries, insurance and pension costs, the city’s heavy reliance on transitional aid, and a lack of detail on vacancies, grants and line‑item savings. Several members pressed the city’s new business administrator and finance staff for more data before they would support introduction or adoption.

“This budget is based on, us getting 27,000,000 transitional aid,” Mark Seaman, the city’s new business administrator, told the council after introducing himself and summarizing his short review of the files. “From an introduction perspective, I'm comfortable with that because I know that we are not going to adopt that.” Seaman said he has been on the job roughly a week and asked for more time to work with council members, auditors and state contacts to identify adjustments.

Council members repeatedly questioned assumptions in the introduced numbers. The finance presentation shown to the council listed increases from 2024 of roughly $4,000,000 for salaries, $3,000,000 for insurance and $2,000,000 for pension costs, and stated the introduced budget reflected a 5.6% municipal tax increase tied to assuming $27,000,000 in state transitional aid and a requested $33,000,000 from Trenton. The administration said it cannot list more state aid than it received the previous year until the state confirms an award.

Several council members urged specific follow-up. They requested a full vacancy list with associated salary totals, year‑by‑year health insurance claims and use rates, a breakdown of grant revenue that increased the grants line from about $10.8 million in 2024 to $20.4 million in 2025 (including a lead-hazard-control grant the CFO identified as roughly $7 million), and a line‑by‑line review to identify cuts that could lower the introduced tax rate.

Councilman Uddin pressed the administration on contingencies if the state provides less aid than requested. “The answer would be that we would have to look at layoffs. That's 100% what the answer would be,” he said, noting there are few alternatives to close a large gap.

Councilwoman Cotton argued publicly against the size of the introduced increase and warned the public on the optics of introducing a 5.6% figure. “None of us sitting up here is gonna vote for a 5.6% tax increase. Not 1,” she said, while also supporting the budget introduction process in order to preserve the city’s eligibility for transitional aid.

Several council members said they would support an introduction that used a smaller, more defensible tax increase or that came with a clearer plan showing where reductions would be made if state aid falls short. Others said statutory timelines and the city’s memorandum-of-understanding (MOU) with the state — which they said restricts use of certain surplus balances — constrained some options.

Action and next steps: Councilmember Davila moved to introduce the budget; the motion was seconded but the resolution failed (3–5–1). Council members directed the administration to provide the requested vacancy and claims lists, additional budget scenarios that would lower the introduced increase, and written detail about the grants shown in the packet. Several council members suggested a special workshop or meeting the week of May 20 for a more detailed line‑by‑line review before any final adoption vote.

Why it matters: The introduced budget is the administration’s formal statement to the state of the municipality’s fiscal plan; introducing a budget that assumes a significant amount of state transitional aid can preserve a city’s eligibility for that aid but also sets a headline tax‑increase number that can harden into adoption if not adjusted. Council members said residents have complained to them about rising costs and reduced services and urged more transparent, defensible numbers and contingency planning.

What the council requested from administration: a complete vacancy list and payroll impacts; year‑to‑year health claims and use‑rate reports dating back to the city’s move into the state health plan; itemized grant descriptions and revenue assumptions (including the lead-hazard-control grant); a list of possible ordinance or fee changes suggested by the Department of Community Affairs (DCA); and options to reduce salary or appropriations increases.

The council also agreed to seek a written explanation of the MOU constraints staff referenced regarding the city’s surplus and retain the ability to call a special meeting if new state aid figures make a revised introduction advisable.

The budget debate continued into procedural items and adjournment; council members said they plan further workshops and a more detailed review of the finance staff’s proposals before any adoption vote.