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The Boss
THE HIGHEST TAXED CITY

By David Dayton McKean
This Web version, edited by GET NJ, COPYRIGHT 2003

It is interesting to notice that, while the curve of Jersey City's taxes has ascended steadily from a rate of $21 in 1917 to $53.13 in 1940, there has been a slight drop in every election year, followed immediately by a new and greater increase. The rate in 1920 was $30.97, but in 1921, an election year, it fell to $29.16, followed in 1922 by a new high of $34.48. Using this trick the city administration has always been able in an election year to assert that taxes are on their way down. In the pamphlet published in 1937, `Jersey City Has Everything for Industry' the city could report that `the 1937 budget produced a material reduction in the tax rate.' There was a reduction, for that was the year that Mayor Hague was re-elected for the fifth time; the extent of the `material reduction' was $1.57 – the rate came down from $45.81 to $44.24 – but in 1938 a new high was attained at $47.54. The use five different times of the device of temporary reductions must prove, not only that the citizens have memories that cannot extend over a period of more than four years, but, more important, that the tax rate is completely under the control of the city administration.

The depression brought no reduction either in the rate or in the amount of taxes levied, except in the election years of 1933 and 1937; on the contrary, the rate advanced from $34.70 in 1929 to $53.13 in 1940, and the amount appropriated for the city government, excluding schools, from nine millions to sixteen millions. The wave of tax delinquencies that came with the depression not only forced the city to default on its debt, but it also produced a series of drastic pay cuts for city and county employees. Because the city has already refunded most of its debt, the history of the salary reductions shows the behavior of the only other important elastic item in the budget.

Mayor Hague met bravely the onset of the worst of the hard times by announcing on January 21, 1932, that for the duration of the depression no municipal employee needed to fear a cut in wages. He was able to hold to this promise for only four months; on May 26 he announced that a cut was necessary: ten per cent on salaries below four thousand dollars and twenty per cent on those above, reductions which were made retroactive to January 1, twenty days before he told the employees not to worry. The county announced the same proportional and retroactive cuts. The Mayor said at the time that the city would save two million dollars and the county six hundred thousand dollars.

Instead of improving, tax delinquencies got worse through 1932 and 1933. Worn out, according to the newspapers, the Mayor sailed for Europe late in May for a vacation, expecting to stay until August. He visited Italy and was received in a private audience by Pope Pius XI. Things were not going well at home, however. On July 10, City Commissioner William B. Quinn announced that the Mayor had been informed of the necessity for drastic pay reductions and had consented `reluctantly.' The commission then reduced salaries from forty to fifty per cent. The cries of anguish that resulted were heard in Italy; the Mayor ended his vacation and returned to Jersey City on July 25. He asserted as soon as he got to his office that he had not known that salaries were going to be cut, and that fifteen or twenty per cent of the new cut would be restored. On July 27, in fact, twenty-five per cent of the new reduction was put back. The city met its payroll by issuing tax-anticipation notes at six per cent interest; the employees received one fourth of their reduced salaries in these notes and the remainder in cash. It was not until December, 1934, that the city was able to pay them in cash, and not until the budget of 1940 that salaries were restored to their old levels.

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