The Power to Destroy

The Jersey City Council must have worked hard preparing for Wednesday night's meeting. They must have heard that a lot of people were going to come out for the first public hearing on the proposed city budget.

The City Council must really have wanted to put on a show. Because in the first half hour of the meeting, as though it was rehearsed, the council showed the hundreds of people present exactly what is wrong with the City of Jersey City and why it carries the weight of a $45 million structural deficit and $800 million in debt.

Early in the meeting, as the council was going through the first reading of proposed ordinances, Downtown Councilman Steve Fulop said city taxpayers were getting robbed at every council meeting. By spending a few million here and there with little discretion, the city was stealing from the taxpayers. The pistols were out Wednesday night.

First, the patronage.

The board members of Jersey City's two utility authorities, the Incinerator Authority and the Municipal Utilities Authority, work only a few hours a month. They are responsible for oversight of the authorities, not day-to-day management of their operations. It's not even a part-time job, and no one pretends it's not a patronage position. Yet Jersey City pays the full cost for health insurance for all authority board members.

The city probably shouldn't provide health insurance to the board members at all; they are serving the public as overseers of a public authority on a part-time basis. Wednesday night, a small reform was proposed to the council: an ordinance to require board members to make a twenty-percent co-payment for their health insurance.

The reform was a "compromise" favored by Mayor Healy. It sought to deflect an ordinance proposed by Downtown Councilman Steven Fulop that would have taken the benefits away totally. The council voted to introduce the Healy-backed ordinance. *

Then there were the cars.

City Council members and about 39 of the mayor's very favorite employees are granted the use of city-owned cars. The city pays to insure the cars and pays to put gas in them. They are not marked as city-owned cars.

Fulop introduced a resolution to restrict the use of the cars and to require that they are marked as city-owned vehicles. Most cities already do that. This way, if one of the cars is parked at, say a local drinking establishment, a citizen can take the initiative to walk into the bar to make sure the employee is there just to check the proprietor's liquor license.

It was too much to ask. The council voted 6-2 to reject the ordinance on its first reading. Only Fulop and Councilwoman-at-large Willie Flood voted for it.

Finally, the was the uncomfortable matter of a quid pro quo.

Item 3(i) on the council's consent agenda was:

Ordinance approving 1) An $8 million loan to the City of Jersey City to be guaranteed by the United States Department of Housing and Urban Development pursuant to §108 of the Housing and Community Development Act of 1974, as amended, and 2) A re-loaning of the proceeds to Statue of Liberty Harbor North Redevelopment Urban Renewal, LLC.

Fulop asked corporation counsel Bill Matsikoudis a question concerning the ordinance. Did not the principals of that limited liability corporation donate money to the Healy council slate? Yes, they did, answered the counsel. (It was hard to hear in the crowded room, so I confirmed this later with Matsikoudis.)

No matter. Although the loan comes with no requirement to build anything in particular, nor a guarantee that anything will be built, the council proceeded to approve the loan 6-2. The only council members to vote against it were Fulop and West Side Councilman David Donnelly. What do they have in common? Neither ran on the Healy council slate in last year's municipal election, which means neither received a contribution from the corporation's principals. The rest of the council voted on principle: Say yes to your contributors.

Certain members of the council have gotten in trouble before for just this sort of thing.

Mariano Vega, now under indictment by the federal government for accepting cash bribes to take official action, used to run the council's tax abatements committee. He had a habit of granting tax abatements—long-term agreements in which developers agree to make payments to the city that are much lower than regular property taxes—to campaign contributors, like the developers of Crystal Point.

I buttonholed Vega during a break. I asked him, considering his current legal situation, how could he justify continuing to vote on city business effecting contributors to his campaign?

Vega made a three-pronged defense. First, Vega said, he does not remember all his campaign contributors, and that he considered his legal duty merely to be to record all his contributors and file the records with the state "as the law requires". He did not respond when I reminded him Fulop and Matsikoudis had just discussed the contributions before the vote.

Second, Vega said the contributions were too old to matter. "When did they occur? That's important," he said. He meant that the money changed hands before a strong anti-pay-to-play ordinance was approved by the council a week after Vega and others were arrested for extortion.

Third, when I pressed Vega on his legal situation and if it should preclude him from at least some council votes, he asked me what I meant. I said I meant that he was under an indictment based on taped evidence for accepting cash bribes from a secret witness. Vega said he pleaded not guilty to the charges and maintained his innocence. He told me that when he became a councilman, he took an oath to the Constitution and that the Constitution provides for the presumption of innocence.

As I played prosecutor, I will let readers play jury.

To make the night a true farce, the City Council unceremoniously rejected a benign ordinance that would require its meetings to be broadcast on the JCTV public access television channel. Fulop proposed the ordinance. The council voted it down in front of the a.v. equipment the city would need to broadcast the meetings. Council business is projected onto a large screen in the chambers, and each council member has a screen displaying the proceedings in front or him or her on the council table. The fifty or so people who turned out to speak about the budget were all on the big screen. It probably wouldn't require too much effort to get the recording on the air.

All this preceded the budget hearing. The fifty or so people took about three hours to speak. They were among a group of more than 300 who turned out. Of course the crowd dwindled throughout, it was quite grueling. But it was an impressive protest.

The most passionate speakers were from Bergen-Lafayette and Greenville, the most dangerous parts of Jersey City and the parts that would be hardest hit by the Healy administration's proposed $40 million property tax increase.

For the most part the council members were impassive. Several speakers directly antagonized certain council members. At one point, a speaker challenged Journal Square Councilwoman Nidia Lopez to prove that she had settled her tax problems in Florida. Lopez went to her office to fetch a receipt. Vega came under sustained boos and catcalls; more than one speaker directly asked him how he could continue to sit at the council table. He didn't say anything.

The axiom says the power to tax is the power to destroy. As the City Council watched person after person come to the front of the chambers and say they or people they new risked losing their homes if taxes were increased any more, they heard testimony of destruction. They don't seem prepared to take action. Maybe like their former leader Vega, they want proof beyond a shadow of a doubt that the city is being destroyed before they do anything.

* * *

Over the Limit

No one seems to have noticed that the property tax increase Healy proposes in the fiscal year 2010 budget is more than what is allowed by state law. The budget proposes raising $195,195,586 through taxation. The budget proposal says the "maximum allowable amount to be raised by taxation" is $185,059,370. At Wednesday's meeting, Business Administrator Brian O'Rielly said his office was working on getting the tax rate in line with the limit. 

D.C.

* Corrected February 26 at 5 PM: I incorrectly reported that the council rejected the twenty-percent payment ordinance. That was wrong. The council rejected Fulop's ordinance stripping the benefits, four to three. It voted to introduce the Healy-backed twenty-percent ordinance, with only Fulop and Richardson voting against that. The point may be moot. Corporation counsel Bill Masikoudis wrote a memo to the City Council saying the authorities have no legal right to give the benefits unless the council passes an ordinance explicitly allowing it, which the council has apparently never done.

Comments

[Tony]

Hi Douglas,

There is currently a petition circulating to the state government, including Governor Christie, to deny the unlawful increase in taxes. You can find it at the link below. There were also paper copies being circulated at last night's meeting.

http://www.gopetition.com/petitions/stop-the-jersey-city-tax-increase.html

[Diana Hutyk]

Based on your article, I sensed a lot of implications. First, each time you mentioned how the council voted, it seemed like Downtown Councilman Steve Fulop was portrayed like he was unlike the rest of the council. I think it's a interesting point to notice and it does look like he knows how to help Jersey City. And second, if what you claim is true about the Healy council votes - that they are based on contributions - then they should be punished since they have not learned from their predecessors.

I thought it was funny that Vega didn't know what the word 'preclude' meant, and I was glad to hear that Jersey City's citizens came out to protest the proposed ordinances. I hope the council went to sleep with disturbed consciences. I don't expect much of the budget to change except for that million they went over. Good reporting.