Mayor Says Trenton Must Provide Means For Real Tax Savings

For the past twenty-four years, it has been my privilege and honor to serve you as Mayor of our great city. I have always believed that you, the people of South Amboy, are our greatest asset and it is you that will continue to advance South Amboy into the 21st century.

Throughout my tenure as mayor, I have always trusted in your ability to decide what is in the best interest of our city. At this important crossroad in our city’s future, it is critical that you be able to evaluate and understand the cause and effects of how actions in Trenton directly impact South Amboy.


During the past several weeks, I have been out meeting with many of you. We have discussed where our city has been, the progress we have made, as well as our city’s future. In the wake of the sub-prime mortgage meltdown which arguably was a catalyst for the worst economic crisis since the Great Depression, many of you expressed an understanding of what has happened during the past few years such as the loss in state revenues to the city and the mandatory doubling of our pension payments. I was encouraged by many of you I spoke with to write this letter to help our residents fully realize the impact of our state’s economic crisis has had on our city.

The following has occurred to both our City and Public School Budgets:

• The City’s employee pension contributions have grown from $51,923 in 2004 to $856,852 this year which represents a 1600% increase with 20% less city employees. Under the Whitman administration, the State took $2.9 million in pension funds to invest in the stock market-a move that proved to be disastrous and from which we have yet to recover.

• Our City’s Consolidated Municipal Tax Relief Aid (COMPTRA) was approximately $412,000. This year, the City received ZERO DOLLARS in COMPTRA.

• Since 2008 the City has lost $573,000 in both Energy Receipts Tax and Supplemental Energy Receipts Tax.

• Since 2007, the City of South Amboy has lost $850,000 in State Aid.

• In addition to the above, The South Amboy School District has lost $750,000 in school aid reduced by the State of New Jersey.

This total of nearly $3.4 million lost in city and school revenues and increases in pension payments is a direct result of decisions made by the state of New Jersey; actions which have created a tremendous hardship on the taxpayers of our City.

The message conveyed from Trenton is that the problem lies within our boundaries; that is, it is the person who picks up your garbage, plows our streets in the winter, or educates our public school children that are the source of our economic problems. While there is no doubt that there are some reforms needed in the public employees’ pension systems, it is wholly unfair to blame public employees, local governments and school boards when the pensions and the majority of employee salary increases are controlled by state statute.

As Mayor of the City of South Amboy I cannot help but recall the famous quote from Harry Truman “the buck stops here,” and by no means am I trying to run from the responsibilities of my office. However, the fact remains that nearly 80% of our municipal expenses are non-discretionary, meaning those expenses are mandated by state law. To target our municipal workers and teachers when the State legislature has the ability to change the laws is patently unfair. It is also a charade for those in Trenton to claim victory by placing a two-percent cap on municipal budget increases, while carving out an exception for pension and insurance expenses. This is not real reform and is tantamount to a 2003 declaration of “Mission Accomplished” by another former president of the United States!

With all this being said, our municipal government continues to maintain a stable tax rate. A recent report from our Tax Assessor, shows the City of South Amboy continues to hold one of the lowest effective tax rates in Middlesex County.

In closing, you can be confident that we will continue to find the most cost effective means to run our city government as well as lobby our state legislators for true pension and salary reform that will translate into real tax savings.

Until next time, thank you for your time and understanding.

Enjoy the remainder of your summer, and may God bless you and your families.

Mayor John T. O’Leary
South Amboy

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