'Very difficult budget': Hackensack's new spending plan brings a property tax increase

HACKENSACK — The city’s budget will increase by 3.1% from last year, largely due to a rise in the cost of health benefits. The owner of an average assessed home of $320,475 will see a tax increase of $244.

Health benefits and insurance costs went up $7.3 million over last year, said James Mangin, the city’s chief financial officer. The budget’s total spending increase was $6.4 million; spending outside of health benefits went down by more than $800,000.

The 2024 municipal budget, which totals $128.59 million with a tax levy of roughly $96 million, was adopted by the City Council on Tuesday.

Hackensack is self-insured, unlike most municipalities in the state, which use the state health benefits plan for public workers.

“The entire spending increase is because of the health benefits,” Mangin said. “We’re self-insured. Self-insurance saved us a lot of money from about 2014 to 2022, up to and including the pandemic, but the past two years we’ve seen claims go up.”

During the pandemic, many people stayed home and were less likely to become sick or injured. People also put off elective surgeries during that time. Then, starting about halfway through 2022, claims went up as workers began getting procedures they had delayed, Mangin said.

The city's health benefit medical claims increased in 2022 by more than $3.4 million, or 20.5%, over the budgeted amount of $16.6 million, forcing the city to transfer money from other budget accounts and tap for the first time into its employee benefit trust fund.

With the increase this year, the city is planning on taking steps to rein in the costs. City officials are looking at other providers and have created another plan specifically for pre-Medicare retirees — retired workers under 65, whose claims went up the highest in the past two years.

The city is also working with a company that will review all out-of-network claims to ensure it doesn’t pay more than necessary. Officials did something similar in 2018 for prescription claims and it yielded savings, Mangin said.

Revenue from financial agreements the city negotiated with developers, known as payments in lieu of taxes, or PILOTs, helped offset some of the tax increases, Mangin said. The city is anticipating $6.5 million in PILOT revenue, up from $4.4 million last year.

To minimize the tax increase to residents, any positions left open through retirement or resignation were not filled, and the city is aggressively monitoring overtime.

“Even though this was a very difficult budget and even though we achieved a lot of savings in salaries through attrition, the city still has the same number of firefighters and police officers as we had last year,” Mangin said. “That’s our commitment to public safety.”

This article originally appeared on NorthJersey.com: Hackensack approves budget. Here's what it means for taxpayers