In private and speaking frankly and candidly, unlike his statements made "on the record" and intended for public consumption, Gaughan has flat out told others that the proposed transaction is fine, but it makes political conditions "too good for Glenn." The transaction would have covered a budget deficit in the current tax year, ending June 30 of some $20 Million, and some nine years beyond that. Without it there would have to be a tax increase or massive layoffs that could only come in sufficient numbers from fire and police personnel. There will be a much larger budget shortfall in the following tax year when Cunningham would run for reelection as Mayor.

Council member and County Chief of Staff William A. Gaughan is the opposition "whip" resisting Cunningham's proposal. That proposal has been endorsed by the Treasurer of New Jersey, The Local Finance Board, and leading investment bankers not involved in the proposed $300 Million transaction. But Gaughan and other opposition council members, E. Junior Maldonado, Mariano Vega, Peter Brennan, Mary Donnelly, and Council President L. Harvey Smith have knocked down the proposal twice already even though it would give the city ten years of fiscal stability with no tax increases except those from Hudson County. Gaughan has orchestrated opposition to the proposal throwing up objection after objection, despite thorough analysis and approval by experts.

In private and speaking frankly and candidly, unlike his statements made "on the record" and intended for public consumption, Gaughan has flat out told others that the proposed transaction is fine, but it makes political conditions "too good for Glenn." The transaction would have covered a budget deficit in the current tax year, ending June 30 of some $20 Million, and some nine years beyond that. Without it there would have to be a tax increase or massive layoffs that could only come in sufficient numbers from fire and police personnel. There will be a much larger budget shortfall in the following tax year when Cunningham would run for reelection as Mayor.

Gaughan is a Funeral Director and has differed sharply with the municipal bond department of Goldman Sachs, one of the world's most respected investment banking firms and who has no part in the intended transaction. Goldman Sachs took the unheard of step of writing a letter to the council endorsing the benefits and the long-term effects of the transaction on the city. But Gaughan found the transaction unsound, in his opinion, voiced either directly or through the mouths of other council opposition members employed by Hudson County, where he is Chief of Staff. Those Council opposition members now include Council President L. Harvey Smith who was just appointed to the County post of Under Sheriff at $81,000 a year. All the other opposition council members are also employed by the County of Hudson at salaries ranging from $65,000 to $95,000 e year, beneath Gaughan.

Gaughan has proposed the use of some reserve funds to cover the shortfall, but city finance officials have said that those funds have not been approved or released for the city's use by state officials. City finance officials have also said that even if the funds were approved for use and applied to the shortfall, it would completely drain what little reserves the city has on hand and leave nothing for emergencies like heavy snows or any major calamity as happened on 911 when the city incurred expenses of more than $5 Million. And those officials point out, this move would not begin to address the larger deficit next year when those funds would not be available in any case if used now.

Cunningham's restructuring proposal would have avoided any need for any increase this year or next. Cunningham has said that "It is needless to have any tax increase or any layoffs. It is all politically motivated and run by Boss Bill. Let Boss Bill explain that to homeowners getting their new tax bills now, why there needs to be any tax increase at all, when we have provided a way to have complete fiscal stability for the next ten years."

Follow Ups:

• JC Council Bought Off with County Payroll What W ho res 19:38:13 01/26/04 (1)
  • Re: 16 Months and Counting Lovely Rita 23:08:42 01/27/04 (0)