Budget Crisis Looming After Impasse Between Soriano, Township Council on Proposed $5M Bond

Mayor Michael Soriano

PARSIPPANY — A bipartisan group of council members expressed concern about the Soriano administration’s recent budget presentation which is centered on taking out a $5M loan in order to balance the budget. The council was unanimous in voicing their opinion that the administration has not provided sufficient information that would allow them to make an informed decision.

Council President Michael dePierro

Council President Michael dePierro asserted that the budget presented by the administration is not legitimate and will cause a drastic tax increase in 2022. He reaffirmed his position in an email to Parsippany Focus, stating “The $5 million cannot be used as revenue, therefore the administration cannot use it to balance the budget. Until the administration submits a balanced budget to the Township Council, we do not even have a budget to consider.” In addition, the budget received by the council reflects a current fund balance of less than $1,000; $10 to $15M below operating guidelines.

Soriano indicated that he is unlikely to budge on his demand to include the $5M bond and attempted to shift responsibility for the crisis to the council noting in a comment to Parsippany Focus, “The Township Council can either accept the budget by voting yes on the loan and accepting the budget as is, or they could come up with their own plan that could result in a layoff of essential employees and higher taxes for homeowners.”

Councilwoman Janice McCarthy

Councilmember Janice McCarthy said “The five-million-dollar bond is an integral part of the budget. If it is necessary, I will approve it, but so far that has not been demonstrated. Before committing to borrow $5M, I feel it is the council’s obligation to taxpayers to fully understand the budget presented by the administration in early April. Currently, we are in process of speaking with township auditors and seeking clarification on technical issues that were raised. While I would like to approve the Mayor’s budget, if what I have heard so far is confirmed, it appears we could be at a stalemate.”

Councilmember Emily Peterson stated, “The council and finance committee were not given an opportunity to be involved in the budget process in order for a consensus to be reached before the council was asked to vote on the $5M bond at the April 6th council meeting”, adding that the administration was not transparent during the process. “This council has worked together over the years to build trust and a sense of common purpose for the good of Parsippany. This bond is no different. We are currently in the process of getting the information required to make an informed and pragmatic decision and once that process is complete, we can move forward with a clear understanding of the administration’s ask.”

Another issue uncovered during the meeting was the revelation that the Township has exhausted all banked tax increase cap. CFO Juan Uribe acknowledged that while more than a 2% tax increase is likely required to cover the deficit, the town is limited to a 2% increase without making a request for an exception adding, “our backs are against the wall.”

Proposed tax increases in excess of 3% over the past few years have become normality for Parsippany residents with the Soriano administration placing the blame squarely with the prior Republican administration for years of financial mismanagement. While expenditures have steadily increased revenues have not kept pace and budgetary gimmicks that began under the Barberio administration like depleting utility surpluses have been increasingly relied on to cover current fund operating deficits. This has resulted in major increases this year in utility rates for Parsippany residents, with additional increases expected over the next few years. McCarthy pointed out that overutilization of the utility surplus over the past 12 years has created an ongoing operating deficit (estimated at $2M) that remains unresolved.

“My administration has worked very hard on the 2021 budget this was made difficult because of the unprecedented crisis that we are about to emerge from. Understanding that so many residents are dealing with their own financial hurdles we labored to introduce to the council a fair and fiscally responsible budget with a 1.5% increase. We have done everything in our power to keep your taxes low while maintaining the level of services our residents have come to expect. Because of the 2020 revenue shortfalls that municipalities from all over New Jersey are dealing with, the State will allow us to borrow $5 million to make up that shortfall,” said Mayor Soriano.

Business Administrator Frederick C. Carr stated “No comment on draft budget documents.”

Soriano is running unopposed for re-election in this year’s Democratic primary and will face either former Republican Councilmember Lou Valori or former Republican Mayor James Barberio in November. None of the current members of the Parsippany township council are up for reelection this year with Councilmembers Janice McCarthy and Emily Peterson declining to run.

The Township Council will meet on Tuesday, May 18. Due to recently relaxed occupancy rules, the council announced that it would hold meetings at the Parsippany PAL Youth Center, 33 Baldwin Road.  The meeting starts at 7:00 p.m.