Paterson adopts 4% sewer fee increase
Hike linked to stalled state aid, budget gap
By: Joe Melinconico
Paterson Press
PATERSON - By enacting a 4% hike in municipal sewer fees, the City Council on June 23 [2026] took a tiny step toward fiscal self-sufficiency.
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The fact that Paterson had not raised sewer fees since 2021 is one of the reasons officials in Trenton have been holding back a sizable portion of the city's transitional aid from last year. [2025]
..... But the state's $7.4 million check to Paterson for the rest of the 2025 funding is not yet in the mail.
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to get all last year's [2025] aid from the state, the Paterson council was also supposed to increase construction code fees. that hasn't happened.
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The New Jersey Department of Community affairs intends to lay out the "next steps" Paterson needs to take to get the remainder of its 2025 state funding in an agreement covering the city's 2026 transitional aid, said spokespersons Lisa Ryan.
..... Meanwhile, how much transitional aid will Paterson get for 2026? That's the question of the past four months.
..... Mayor Andre Sayegh is asking the state for $78.2 million - a $48.5 million increase over what Paterson got in 2025. Sayegh's request amounts to more than double what the city has gotten in transitional aid for any single budget during the past 15 years.
..... "Without a substantial increase in Transitional Aid, the city would face an untenable choice," said the Sayegh administration's 2026 funding application, "either impose draconian tax levy increases or purse reductions so severe that they would, compromise public safety and essential operations."
Sherrill budget raises aid - but now jersey City wants $150 million
..... Governor Mikie Sherrill's budget for the 2027 fiscal year raises total funding for transitional aid cities by $94. million, to $256.6 million.
..... Sayegh's business administrator, Daniel Golabek, has cited that substantial increase in state wide funding as cause for optimism in Paterson.
..... But Paterson is one of 11 New Jersey cites that received transitional aid in 2025. Three of those - Camden, Trenton, and Union City - got about $40 million each from the state last year, [2025] compared to Paterson's $29.3 million. Moreover, Jersey City has filed a transitional aid application for the first time in more than a decade and is asking for about $150 million.
..... Golabek has said that it makes no sense for Paterson to craft a preliminary budget for 2026 until the city knows how much money it will be getting form the state. Officials say they expect to get that information over the summer.
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For the past couple months, Paterson officials have been paying some of the city's bills whit the $70 million they borrowed in short-term tax anticipation notes.
..... The state gives transitional aid - once called distressed cities aid - to municipalities with chronic structural deficits that prevent them from balancing their budget without help from Trenton.
..... During his first few years in office, Sayegh was able to reduce Paterson's reliance on transitional aid. But now City Hall faces a budget shortfall that could continued for years, even decades.
$1 billion in new projects have not generated revenue
..... The Sayegh administration's funding application says Paterson ability to generate revenue "is constrained."
..... "The city's tax base has remained comparatively stagnate, in par due to state initiative designed to spur redevelopment, including the Garden State Growth Zone," said Paterson officials, referring to a 30-eyar tax abatement program.
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The abatement has helped generate more than $1 billion in new projects in Paterson, but "the city must wait years before realizing the full financial benefit of those investments on the tax rolls," the Sayegh funding application said.
..... Under the Growth Zone, developers don't have to pay any property taxes on their new construction for the first decade, In the 11th year, builders must pay 5% of their property taxes and that rate increases by 5% each year until the 30-eyar tax breaks ends.
..... Supporters of the program said Te h Growth Zone has helped Paterson dramatically reduce its number of vacant and abandoned prioritizes. But critics say it has caused congestion and overcrowding in an already-densely populated city.
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Paterson's 2026 funding application does not say when city officials expect to reduce their reliance on state transitional aid.
.... The Sayegh administration aid request descried he city's status this way: "Paterson is experiencing the service demand impacts of grow , while he corresponding ratable-base benefit is deferred."