Paterson Kicks 5.6% Proposed Tax Hike… For Now

It turns out that when a budget proposal includes a significant property tax increase, city residents are about as thrilled as a cat in a bathtub.

The mayor of Paterson’s proposed 2025 budget of $302 million, which includes a 5.6% increase in property taxes, has faced opposition from City Council members and residents who believe it will create an undue burden on property owners. To obtain approval for the budget, the Mayor needs five votes out of a possible nine from the City Council. But with two-thirds of the council members openly sharing their dissatisfaction with the proposal, approval seems highly unlikely. This has prompted the Mayor to abruptly pull the budget from a planned vote. In the meantime, council members have approved a temporary $80.6 million emergency appropriations resolution in order to fund city operations until the end of May. Paterson Council Approves Emergency Funds After Budget Pulled from Agenda | Paterson, NJ News TAPinto | TAPinto.

Paterson is one of several cities in NJ that relies on transitional aid, a state-run initiative designed to provide support through temporary financial crises. Cities that struggle to maintain payments for critical obligations can apply for transitional funding through the Department of Community Affairs. For the 2024 fiscal year, Paterson received $27 million in transitional aid. In 2025, the city is looking to increase that amount to $33 million. However, council members have expressed doubt concerning the city’s likelihood of receiving the increase. According to officials, the State will not make a decision on Paterson’s transitional aid request until this summer.

Paterson has generated more than $1 billion in development projects since Mayor Sayegh took office in 2018, but many of these projects received significant property tax breaks, some for 20 years or longer. While these tax breaks have contributed to investment in the city, they have restricted the city’s ability to generate revenue from these properties for the foreseeable future. Paterson quietly gave 20-year property tax breaks to developers | Paterson Times.  Property owners that have received tax abatements only pay taxes on the underlying land for ten years, followed by incremental increases until they pay the full amount by the end of the abatement period. This means that the city cannot rely on these new developments to satisfy its current budgetary needs.

Since punting the 5.6% tax increase, Mayor Sayegh has attempted to ease tensions by claiming that the increase will be closer to 2%. He has scheduled a town hall meeting for today, April 29, to address the issue with the public. Many residents have questions about whether and how much the Mayor plans on raising property taxes and how the state’s response to the transitional aid request will play a role.

The prospect of increased property taxes can be daunting for property owners. That is why the attorneys at McKirdy, Riskin, Olson, & DellaPelle, P.C. fight to ensure that they are not paying more than their fair share. If you or someone you know is struggling with a high property tax burden, feel free to contact our firm for a preliminary consultation free of charge.

To read the full article on Paterson’s potential tax increase, click here: Facing dissent, Paterson mayor pulls 5.6% property tax hike for now.