New Jersey Suburb Hit Hard By Budget Woes

With its new fiscal year set to begin on July 1, the affluent suburb of Summit, N.J., is one of many places across the country that's been forced to make tough decisions to balance its budget. As a result of a $700,000 cut in state aid, the city will raise property taxes and decrease the size of the police force, angering many local residents. A large portion of Summit's residents work in finance and real estate, so the economic downturn has hit the city particularly hard.

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For many local governments across the country, the new fiscal year begins this Thursday, July 1st. And this year, that deadline is forcing towns to make some tough spending decisions.

The small city of Summit, New Jersey, is typical. It's had to deal with a combination of rising health care and pension costs, reduced tax revenue, and a loss of state aid.

From Summit, New Jersey, Scott Gurian reports.

SCOTT GURIAN: Summit is an affluent bedroom community about 40 minutes by train from downtown Manhattan. Nearly 20 percent of its residents work in finance, insurance or real estate. And at the height of the financial crisis, Business Week ranked the city sixth on its list of places likely to feel the effects of the economic downturn.

Walking through downtown on a recent afternoon, Carlos Stalgis(ph) says those fears have played out.

Mr. CARLOS STALGIS: It looks like the empty places here are increasing quite a lot. So it looks like the town is dying. The downtown of Summit is dying. So that doesnt make it encouraging for you to want to come here.

GURIAN: Stalgis works for a pharmaceutical consulting company, with offices in Summit. He says he likes the city and wants to stay, but rising rent costs have caused his firm to start looking elsewhere.

Summit is seeing an all-time high in the number of commercial vacancies, yet many local business owners are optimistic that maybe the worst is over.

Susan Hunter is director of sales and marketing at Lois Schneider Realtors. She says the housing market has picked up full force.

Ms. SUSAN HUNTER (Director, Sales and Marketing, Lois Schneider Realtors): We understand that the commercial market trails behind us, but it will come back. And it will come back first to towns like Summit, where we have a population that will support good shops and good restaurants, and all of that.

GURIAN: But the recent elimination of two police positions offers proof that the city's budget is still tight. The cuts concerned many local residents, including travel agent and former Mayor Walter Long.

Mr. WALTER LONG (Former Mayor): I was very upset about that because of safety issues being a prime concern. And I think if you looked back over the years, our police department has not increased in size at all. And the demand on the police officers - are getting greater and greater.

GURIAN: With 46 members, Summit's police force is smaller than many other towns of similar size.

Jordan Glatt is serving his second term as Summit's part-time, unpaid mayor. He worries that the reduction in staff the city council approved may look like a savings on paper, but might actually end up costing the city more in the long run as remaining employees log overtime to fill the gaps.

The city isnt planning any layoffs or furloughs just yet. But behind the scenes, it's urging departments to save money by sharing services. And Mayor Glatt says it's here that he applies a lesson he's learned from the economic meltdown.

Mayor JORDAN GLATT: There was so much excess pre the crash, if you will, that I think some of our values got skewed as a community and as - I can say generally - as a society. We were having million-dollar homes that were being torn down so a $3 million home could be put up. We're not seeing that in the community like we were. So in some respects, I think maybe this was a healthy reset.

GURIAN: Struggles like those in Summit are playing out in towns and cities across the country as governments are forced to streamline their budgets, making whatever cuts are necessary to bring things into balance.

For NPR News, Im Scott Gurian.

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