Board votes to shift Newark finances into state supervision

By Naomi Nix | NJ Advance Media for
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on October 08, 2014

NEWARK — The Local Finance Board approved today a request from Newark to shift the city’s finances into state supervision.

State supervision will give the N.J. Department of Community Affairs legal power over the city's collective bargaining agreements and the adoption of its budget, among other city functions.

The approval comes a day after the Newark city council voted to adopt Newark Mayor Ras Baraka's amended 2014 budget, officially steering the city out of a $93 million dollar deficit.

But some aspects of the amended budget, such as the city's proposal to pay $30 million dollars of last year's deficit over a decade, required the city to be under state supervision.

“Supervision will give the state more authority to make sure Newark takes common sense steps to get its fiscal house in order and will give Newark the ability to take certain steps to appropriately address its deficit,” Division of Community Affairs spokeswoman Tammori Petty said in a statement.

The Local Finance Board deferred an action to ratify the city's 2014 budget until an Oct. 14th meeting, when there will be a public hearing.

In addition to state supervision, the Local Finance Board will have to determine the terms under which the state gives the city transitional aid, or money given to municipalities in budgetary emergencies.

Those terms will be outlined in a memorandum of understanding, which in the past has included installing a state monitor to look at Newark's finances and requiring municipalities to ask for permission before hiring.

The state agreed last month to give Newark $10 million transitional aid -- about a third of the $31 million the city originally asked for. Baraka offered an amended budget to the city council on Tuesday, which pared down the $93 million deficit with no layoffs.

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