Nov. 30 (Bloomberg) -- Newark Mayor Cory Booker began firing 15 percent of his police department today, illustrating the actions that cities in the second-wealthiest U.S. state are being forced to take to confront lower aid and tax revenue.
The 167 dismissals in Newark, New Jersey’s largest city, come as Camden Mayor Dana Redd won approval to cut the police force by almost half, eight days after CQ Press rated her town the second most-dangerous U.S. city. Paterson, New Jersey’s third most-populous city, may boost the property-tax bill on a typical home to $6,819 from $3,896, according to information filed with the state’s Division of Local Government Services.
Those municipalities, along with more affluent communities such as Howell in Monmouth County and Montclair in Essex County, are cutting jobs, raising taxes and reducing services such as libraries and pools after Governor Chris Christie cut state aid by $446 million, and property owners won millions of dollars in tax appeals on declining property values.
“I inherited a leaking bag here,” said Joseph Menza, 50, part-time mayor of Hillside Township, who faces a court battle with unions challenging his plan to fire 50 of 330 workers in the community of about 22,000 adjacent to Newark. “We’re not going to make June, that’s pretty apparent. We’re going to run out of money. We don’t collect it as fast as we spend it.”
New Jersey’s local budget constraints have sparked concern at Moody’s Investor’s Service, which has cut credit ratings on 12 New Jersey cities since Aug. 31.
Cities downgraded by Moody’s include the state capital of Trenton; the Bergen County community of Wood-Ridge, whose mayor, Democratic state Senator Paul Sarlo, is chairman of the Senate Budget and Appropriations Committee; and Seaside Heights, the home base of MTV’s reality television show “Jersey Shore.”
A Nov. 24 Moody’s report on its decision to downgrade the general-obligation bond rating for New Brunswick, the home of Rutgers University, to A2 from A1, cited a declining fund balance, fixed costs for employee pensions and benefits, and this year’s $2.5 million state aid cut.
New Jersey municipal finances also have been affected by caps lawmakers have imposed on local tax-raising since 2008. The original 4 percent limit on annual property-tax increases will drop to 2 percent Jan. 1, under a measure Christie and the Democratic-controlled state Legislature approved in July.
“It constrains revenue-raising capability,” Josellyn Yousef, director of New Jersey city ratings at New York-based Moody’s, said in a telephone interview yesterday.
Cities such as Newark and Camden have no choice but to cut personnel costs, which make up the majority of their budgets, officials including Menza say. In Hillside, staff costs account for 70 percent of spending, he said.
Paterson, the city where Alexander Hamilton is credited with founding modern manufacturing, proposes to raise the local tax rate to $1.90 per $100 of assessed property value from $1.20, and to make government workers take 10 days off without pay to address a $70 million gap in the $251 million budget for the year that ends June 30.
The city of about 150,000 has refunded $6.6 million in successful tax appeals since 2009, and faces the potential of $10 million more in appeals losses, according to its application for special state aid.
“We’re trying to figure out what to do,” said Russell Forenza, Paterson’s budget officer.
Newark has eliminated more than 400 positions in the past month, Julien Neals, the city’s acting business administrator, said today at a press conference. His office is in “last-minute talks” with union leaders to avert 150 of 400 planned firings in various city departments scheduled to take place today, he said after the press conference.
“You’re talking about a massive restructuring of our city’s government and a massive shrinking of it,” Booker told reporters today in his City Hall office. “We’ve passed as little burden as possible onto our taxpayers.”
Alonso Vineeza, 33, turned in his gun and badge today after having walked a foot patrol in high-crime areas since graduating from police academy in March. He said he’ll “regroup” in coming days and look for other police jobs. Booker and his administration, the police union and economic factors are all to blame for the terminations, Vineeza said.
“There’s many villains in this story and basically it’s up to you to choose which caused more collateral damage,” said Vineeza, a former state child-abuse investigator and father of two who’s confiscated illegal guns and responded to robberies.
“Without a doubt crime will go up,” he said in an interview. “I live in the city of Newark. We need more cops, yet they laid off 167. It’s not feasible.”
In Camden, where about a third of residents live under the federal poverty level, according to U.S. Census data, pension payments on behalf of police, firefighters and city workers will total $17 million next year, almost as much as the $21 million the city expects to raise through property taxes.
Police cutbacks at the level the mayor has proposed “will be the kiss of death,” John Williamson, president of the Camden Fraternal Order of Police Lodge, said in a telephone interview. “At this point we’re in the position where we’re certainly not controlling crime, we’re just managing crime,” he said.
Camden won approval today from the state Civil Service Commission to fire 180 of 373 police officers on Jan. 18. Marc Riondino, city attorney, said the plan won’t jeopardize safety.
“Trash will still be picked up, firehouses will remain open and we’re still going to adequately patrol the streets of Camden,” he said. “It all comes down to refocusing our priorities.”
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