Rahway City Hall
RAHWAY, NJ — More than half of the $82 property tax increase this year is due to the unexpectedly large number of residents participating in the state’s program to purchase homes repeatedly damaged by flooding, City Council members said Monday, July 23.
The revelation came as the council voted unanimously to adopt the $37.7 million municipal budget.
About $55 of the $82 increase is attributed to the loss of revenue due to residents applying for the Blue Acres program, interim Mayor Raymond Giacobbe Jr. said.
Blue Acres was launched in 2013, after Superstorm Sandy had deluged the state the previous year. The program began to solicit applications from Rahway homeowners in 2016, and the state Department of Environmental Protection announced the first buyout of a flood-prone house in Rahway two years ago.
Rahway Business Administrator Cherron Rountree said the town expected approximately 10 homeowners to apply to have their properties purchased by the program, so when owners of about 30 houses in the city applied, she said the council was “shocked.”
Under the program, the houses are demolished and the state takes ownership of the land, but the town is responsible for its upkeep, Rountree said.
She said the properties cannot be developed and therefore will not generate tax revenue for the town. The open patches of land left behind by the demolition of Blue Acres houses, like the area left behind by the nine properties cleared on New Church Street and five on Central Avenue, could be turned into parks, Rountree said.
The program is similar to Green Acres, a state program that provides funds to municipalities for parks and other recreation areas but restricts development and use.
Although the loss of revenue has contributed to the tax increase, Giacobbe said the city will ultimately benefit from the move.
“It was looking out for the citizens more than the city’s budget, more or less,” Giacobbe said. “They weren’t going to be able to sell those homes. Every time there was flooding they were putting in claims. And it was getting to the point where the quality of life for the people in those homes was down.”
Rountree said the city has been operating on a temporary budget, which is usually adopted earlier in the year. She said the resignation of former Mayor Samson Steinman on Dec. 24, 2017, delayed the process of drafting the 2018 spending plan.
Steinman abruptly resigned last year after twice crashing his city-issued car and taking a seven-week medical leave. He later told NJ Advance Media that he is bipolar.
On Jan. 8, the Rahway City Council replaced Steinman by unanimously voting in Giacobbe, the former council president who represented the 6th Ward, to serve as interim mayor.