Mayor Martin proposes pay cuts for township employees: ‘It absolutely sucks’
HAMILTON » Here comes the pain.
Mayor Jeff Martin wants to raise property taxes and lower employee salaries as the township deals with the economic fallout of the coronavirus pandemic.
“This pandemic has wreaked havoc on our economy, closing many businesses and putting our Town, State and Country into a recession,” Martin says in a letter to Hamilton’s municipal workforce. “We have thousands of residents who find themselves without a job, either temporarily or permanently.”
As he crafts his 2020 municipal budget during a public health crisis and economic downturn, Martin is asking township employees to take a 10 percent pay cut this year. He says the wage-cutting proposal “needs to be done to protect our employees from far more drastic action and to ensure our community and its residents are not put in a worse financial position due to COVID-19.”
The U.S. economy may currently be experiencing a “recession” as Martin suggests, but it is too soon to make any official pronouncements.
According to the National Bureau of Economic Research, “A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail sales.”
The Martin administration forecasts a “significant decrease in revenue for 2020,” the mayor said in his letter, citing expected declines in construction fees, hotel use fees, municipal court fees and investment income.
“While I would love to have local governments assisted by those above us,” Martin said, referring to Washington politicians who support federal bailouts and economic stimulus, “as mayor I cannot hope and pray we will be taken care of down the line.”
Martin, a Democrat, said it “absolutely sucks” the wage-cutting option is on the table, moreso because the pandemic is already putting some Hamiltonians in tough positions.
Martin said he wanted to be upfront and transparent with residents rather than them finding out through the “rumor mill” that he favors municipal pay cuts.
“A month ago, we wouldn’t even be considering this option,” he said Tuesday in an interview with The Trentonian. “Now with the pandemic and the economy the way it is, we find ourselves in far more dire straits. With that, comes having to take and plan for more drastic measures.”
Across the state, Democratic Gov. Phil Murphy ordered non-essential business to close. While restaurants and bars may continue offering delivery and takeout services, some Hamilton restaurateurs opted to shut their doors, effectively laying off employees, because of dragging sales.
The proposed 10-percent municipal pay cut would apply to Martin, who makes about $120,000 a year as township mayor. He said the pay cuts wouldn’t go into effect until around the end of April, meaning employees would only take a 10-percent hit on two-thirds of their salary for the year.
For example, Martin said an employee making $60,000 a year would be due about $40,000 when the cuts take effect, so they’d face about a $4,000 decrease rather than $6,000.
Martin said, even with the proposed pay cuts in place, the township anticipates still having to raise taxes since the township depleted its rainy-day fund, using about $6.6 million in surplus to close the gap in last year’s budget, as part of former GOP Mayor Kelly Yaede’s adopted taxcutting budget ahead of the 2019 election.
The township had $6.1 million in surplus at the end of 2019, said Martin, who supported Yaede’s tax-cutting budget and defeated her in the general election last year.
Residents can expect a 2020 municipal tax hike. The magnitude of this anticipated tax increase is still being worked out, Martin said, and the township will “wait and see” what finances look like after the first quarter.
“Even if we take this measure, there’s going to be a tax increase this year. There’s no way around that,” Martin said. “We’re running different scenarios. We’re running different forecasts. With this being so unprecedented, it makes it really difficult to [predict] what we may be dealing with.”
Layoffs are possible if the township can’t reach an agreement with the unions, the rookie mayor said.
Martin’s wage-cutting proposal is bold but not unprecedented in township history.
Former Republican Mayor John Bencivengo in 2010 persuaded township employees to take eight furlough days of unpaid absence to help the township produce a balanced budget in that year of economic hardship.
Bencivengo famously threatened Hamilton Police with layoffs if the officers did not accept his furlough concession plan. The township PBA and Superior Officers Association ultimately accepted the plan to sacrifice some of their pay to save everyone’s job.
When Bencivengo took office during the Great Recession in 2008, he announced 13 municipal employees would be laid off that year. He implemented a significant workforce reduction even as CWA Local 1042 denounced the layoffs as “unnecessary.”
Bigger than Hamilton, the coronavirus pandemic is expected to negatively impact New Jersey’s fiscal health, according to a statement issued Monday by Liz Muoio, the state treasurer.
“The impact of COVID-19 on the state, its economy and budget and finances is unpredictable and rapidly changing,” Muoio said, “but the state believes that events surrounding COVID-19 will negatively impact the state’s economy and financial condition.”
The Garden State now through June 2021 “expects precipitous declines in revenues” over that 15-month period, Muoio said, citing expected declines in the gross income tax revenues, corporate business tax revenues and sales tax revenues.
States taxes on gasoline and casinos are also expected to yield lesser revenues thanks to Gov. Phil Murphy’s executive decision to impose business shutdowns, community lockdowns and social distancing guidelines in the fight against COVID-19, Muoio conceded, adding lottery sales “have already started to decline.”
With the COVID-19 pandemic and economic downturn impacting Hamilton Township and beyond, “Our hope is to negotiate with the unions to get us through this situation,” Martin said. “My sincere hope is that everyone sacrifices a little so someone doesn’t have to sacrifice everything. I don’t take lightly at all that many employees — I added to that stress today, and I added a new unknown of what their financial situation is going to be. That’s not something I like to have to do. It absolutely sucks.”