Cities and towns say layoffs, furloughs and service cuts will happen unless they get help from the federal and state governments to help cover record declines in revenues from permits, licenses, parking fees, investment returns and property taxes.

Collections of property taxes for the second quarter, which were due in May, appeared to be down slightly but not precipitously. Mayors fear the third and fourth quarter payments, due in August and November, won’t go as well as mortgage escrows and bank accounts are drained.

“So the banks were paying the taxes for the second quarter,” said Clinton Mayor Janice Kovach. “It will be the third quarter where people haven’t made their mortgage payments or they’re not able to make their tax payments that we expect to see more of an impact to our collection rate.”

Mayor Michael Venezia said Bloomfield projects a loss of $3 million in revenue, including almost $1 million from its parking utility alone. He’s most concerned about residents’ ability to pay their property taxes in August and November.

Venezia said Bloomfield typically has a 98% collection rate for its property taxes but that it fell to 95% for the payments due in May.

“If revenue losses are not addressed, we could be looking at layoffs or furloughs. The layoffs could come to roughly 5% of our workforce,” Venezia said.

Like Kovach, other mayors said the declines are expected to get worse but were marginal in May.

New Jersey State League of Municipalities President James Perry said Hardwick, where he is on the township committee, is bracing for a drop over the summer.

“For the second quarter, our tax collection rate was actually quite normal. We are expecting a little bit of a hit on the third quarter,” Perry said.

“Our collection rate was higher than we anticipated,” said Bridgeton Mayor Albert Kelly. “But as you said, the third quarter is what we’re really looking at and planning for.”

U.S. Bureau of Labor Statistics figures show that between February and May, local governments shed 8,200 jobs, or 6% of their workers. School districts cut 18,500, or 7%. The state cut 1,700, or 1%.

Kovach said state and federal help are needed because the economic downturn caused by the coronavirus and related shutdowns will have long-term ramifications.

“It’s not just this year. We are looking at a next year and possibly 2022 impact to our financial houses within our communities,” Kovach said.

Enter your number to get our free mobile app

Municipalities hope to receive a share of funding New Jersey received through the CARES Act or a portion of future funding that might be approved by Congress.

They also could receive a portion of the funds that Gov. Phil Murphy’s administration wants to be able to borrow from the Federal Reserve, if the state Senate agrees to a bill already passed by the Assembly. That money would have to be repaid.

More from New Jersey 101.5:

Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at michael.symons@townsquaremedia.com.