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Newark to ask state for $28M to close budget gap

NEWARK, N.J. (AP) — Months after the state threatened to take over the city’s finances, Newark is poised to ask for $28 million in state aid to close a budget gap.

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Recently inaugurated Newark Mayor Ras Baraka said Monday that the proposed budget won’t include any cuts to police or fire department personnel. He said it’s part of a strategy to focus on new revenue sources and more efficient collection of revenues from existing sources, rather than on widespread cuts.

“If we just did all cuts we’d be cutting hundreds of employees again, and police and fire would probably be in that,” Baraka told The Associated Press. “Newark has significantly cut the police department and fire department down, and you see the results of what’s been happening in the streets. If we do it again we’d be in dire straits. To raise the kind of money we need, we’d have to lay off hundreds of employees. That’s not part of the question.”

Instead, the city plans to ramp up its enforcement and collection efforts to reap tax revenues that currently aren’t being paid, an effort that could yield between $10 million and $20 million, said Henry Amoroso, a finance lawyer who is consulting the city on the budget process.

“You’d be amazed what we leave on the table just by not going and knocking on the right doors and collecting,” said Christopher Cooper, a Prudential executive who also is consulting the city on the budget.

Baraka said he is looking closely at making general city operations more efficient, though he conceded those efforts will only have an incremental effect on the overall budget. He also said he instituted a hiring freeze recently that prohibits filling vacancies without mayoral approval.

The state threatened to take over Newark’s finances this spring when the city missed several deadlines, with a state official referring to the city’s “extraordinary level of fiscal distress.”

Baraka succeeded Cory Booker, who stepped down last year to run successfully for U.S. Senate. Baraka said Newark initially faced a $93 million budget deficit. About $30 million of that is a carryover operating deficit from 2013 that will be largely covered by uncollected property taxes from the previous year, a city spokeswoman said.

 

(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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