Paterson council votes to introduce 2025 budget; adopts cap-bank and tax-reserve measures amid sharp debate

The Paterson Municipal Council on Sept. 9 voted to introduce the calendar-year 2025 municipal budget at an introduction level of 3.5 percent, while also approving related finance steps intended to protect the city from a larger levy increase.

Council members spent the meeting's longest stretch debating the budget's timing and documentation. Several council members, most prominently Councilman Michael Jackson, criticized the administration for scheduling a 5:30 p.m. special meeting and for distributing key budget documents late, saying the public and some council members had inadequate time to review details. Jackson and others said they had not received full budget material in the main packet before the vote and pressed Administration for line-item explanations of cuts and hiring freezes.

Administration officials and some council members said the 3.5 percent introduction reflects negotiations with the Division of Local Government Services (DCA) and adjustments including hiring freezes and a planned use of up to $1 million from reserves to establish a cap bank that reduces the immediate levy increase from an earlier 5.6 percent figure.

Council President Lisonbee Mims told colleagues she and staff had discussed the reserve language with DCA and the city's auditors and that the introduction was required by state deadlines; she said the introduction does not constitute final adoption and that the council and administration would continue work toward a lower final increase.

Votes at a glance - Introduction of the 2025 municipal budget (administration resolution 25426): Motion moved by Council President Mims, seconded by Councilwoman Davila; council approved introduction (the council recorded individual yea/nay votes during roll call and the introduction was adopted for the record). The introduction sets the budget for further review and does not enact the final tax levy.

- Ordinance to exceed municipal appropriation limits and establish a cap bank (first reading, NJSA 40A:4-45): Adopted on first reading; roll-call result recorded by the clerk: 5 in favor, 3 against, 1 absent. The ordinance would create capacity to bank up to the requested cap allowance pending final adoption.

- Resolution increasing the percentage reserve for uncollected taxes (finance resolution 25:427): Adopted (as recorded on the roll call); the clerk announced the votes as 8 in favor, 1 against. The resolution is intended to allow the city's presentation to the local finance board and to compute required reserve levels.

- Application to the local finance board to move $780,000 from inside the cap to outside the cap (NJSA 40A:4-45.3(e); finance resolution 25:430): Council voted to file the application; the clerk recorded the adoption as 7 in favor, 1 against, 1 absent. Administration said the move would keep the budget under the state's 2.5% cap law; CFO and council members questioned the rationale and long-term effect.

Why it matters The council's introduction of the budget allows the city to meet state deadlines that, if missed, could lead to more severe levy increases or service disruptions. But the wide-ranging critique from several council members about late dissemination of documents and limited public visibility turned the meeting into a flashpoint over transparency and fiscal management.

What councilmembers and staff said 'This is the third time this budget has been introduced,' Council President Mims said, noting earlier failed introductions and work with DCA and auditors to reduce an earlier 5.6% figure.

'The public is entitled to understand exactly where these changes came from,' Councilman Jackson said, accusing administration of sending the full budget too late and of asking the council to 'rubber-stamp' the introduction without adequate review.

'We are introducing the 2025 budget tonight. It is a 3.5% increase,' the Business Administrator told the council, describing staff efforts to freeze hires and to use reserves to establish a cap bank.

Context and next steps Introduction is not final adoption. Council members and administration repeatedly said the work would continue through committee sessions and with the city's auditors and DCA. Council leaders encouraged colleagues to submit specific line-item questions and to participate in finance committee meetings before a final adoption vote, currently expected in the fall.

Ending Council members who opposed the introduction said they would continue pushing for a lower final increase and for clearer line-item reporting. Administration officials said they would provide additional materials and expected further revisions before the adoption vote.