PATERSON -- About 680 city employees -- everyone except the fire and police departments -- may have to take unpaid furlough days under a worst-case scenario detailed in Paterson's application for a $48.5 million increase in state aid to close a gaping budget hole.
Also, 58 Paterson municipal workers may lose their jobs if Gov. Mikie Sherill's administration denies Paterson's transitional aid funding request.
Mayor Andre Sayegh's business administrator, Daniel Golabek, said City Hall currently has no plans to impose furloughs or layoffs. He said the city was simply following the New Jersey Department of Community Affairs application process.
"Layoffs and furloughs are a last resort, and are discussed" in the transitional aid application "not out of the administration interest or desire, but out of the need to be compliant and transparent with the DCA about the real world impact of providing only a small boost," Golabek said.
Paterson has included furlough and layoff scenarios in previous transitional aid funding requests without having to take such measures, Golabek said.
But Paterson has not asked for a state aid increase this large since 2010, when then-Gov. Chris Christie's administration gave the city the thumbs down, resulting in a 29% property tax hike and 400 layoffs, including 125 police officers.
In 2025, Paterson received $29.7 million in transitional aid. The Sayegh administration is asking for $78.2 million in 2026. The city's legislative contingent, including two former Paterson council members, promised to intervene on the Silk City's behalf.
"My job as an advocate is to work as hard as possible to bring back to Paterson as much resources as possible to alleviate any major disruptions," said Assemblyman Al Abdelaziz.
Senator Benjie Wimberly said he expects Paterson to get at least a portion of the increase. "I don't know about the full amount," Wimberly said.
Other ways Paterson might close budget gap
- Get approval from municipal labor unions to defer the final employee pay checks for 2026 until the beginning of 2027, which would save $6 million in this year's budget.
- Push back payment on the $70 million in short-term debt the city is using to pay its bills so that the estimated $2 million in interest becomes part of next year's fiscal obligation.
- Borrow the money for this year's retiring employee leave time payouts, instead of using funds from the operating budget, which would save $2 million.
- Look for ways to use grants to cover operating expenses and employee salaries, ask the state for permission to use an extra $1 million to $2 million from its surplus funds, and shift some budget expenses to Paterson's Urban Enterprise Zone account.
The Sayegh administration made its first public budget presentation on April 8 last year. But this year, city officials said they would not put out a budget until June. Sayegh's critics have claimed the mayor tried to hide the financial crisis until after the May 12 city election by delaying the budget.
Mayoral challengers use budget to attack Sayegh
Councilman Michael Jackson, who is one of three men running against Sayegh for mayor, said the massive budget gap stemmed from irresponsible spending of Paterson's COVID relief money and the city's Economic Redevelopment and Growth tax credits.
"Obviously, this speaks to everything I've been saying all along," Jackson asserted. "This was expected considering everything he's done as mayor."
Jackson said he doubts the Sherill administration will provide Paterson the extra $48.5 million the mayor is asking for.
Another mayoral candidate, former councilman Mohammed Akhtaruzzaman, blamed the city's fiscal problems on the numerous tax abatements issued to the $1 billion in new development that has happened under Sayegh's watch.
"We're all suffering because of the tax abatements he gave to his friends," said Akhtaruzzaman, who had been one of Sayegh's supporters when he became mayor in 2018. "The city is in dire trouble. We bet on the wrong horse. We did it once. We did it a second time. Eight years has been too long."
Last year, the state announced how much money New Jersey's transitional aid cities would receive in July. Golabek said he expects similar timing in 2026. Cities that get transitional aid have chronic and structural budget deficits.
Golabek said Paterson is encouraged that Sherrill's proposed budget increases total spending for transitional aid by $96 million over the past year. "There are only 11 participants in that program currently and Paterson is the largest municipality," he said. "This anecdotal information bodes well for the city's 2026 budget."
But a 12th city has submitted a transitional aid application in 2026. That's Jersey City, which is asking for $150 million.
Golabek said "there is considerable speculation in the local government community" that Jersey City will get its transitional aid through a loan and not from the regular budget line item.