Dec. 7 (Bloomberg) -- Newark, New Jersey, where Mayor Cory Booker fired 167 police officers last week to fill a deficit, won’t rule out more terminations as it enters the coming year short by $42 million, Business Administrator Julien Neals said.
“Naturally, we can’t take it off the table,” Neals said in an interview today at City Hall. “The concern is that there comes a tipping point between how much staff reduction you can do for a city this size and still be able to provide services. We’re exploring the breaking points right now.”
New Jersey’s biggest city began crafting the budget that starts Jan. 1 with an estimated deficit of between $90 million and $150 million. The hole was pared down through cuts and new revenue this year, Neals said.
The city saved $44 million with the firings, and raised $6 million from the sale of taxi medallions, $3 million more in parking revenue and $4 million in new funds from the Port Authority of New York & New Jersey, Neals said. A 16 percent property-tax increase will bring in $34.6 million, he said.
Newark, a city of 280,000 where a quarter of its population lives below the federal poverty level, shed 702 workers this year, including about 15 percent of the police force last month, as it struggled to close an $83 million deficit. It hasn’t submitted plans to the state for additional firings, Neals said.
“This is not going to be an easy year -- our goal is to get through it with attrition,” Booker told reporters today in City Hall. “That may not be possible. We’re still going to have a hole next year.”
Moody’s Investors Service as early as today may release its rating on plans by the Essex County Improvement Authority to sell about $87 million in municipal bonds to purchase Newark’s municipal buildings, Neals said.
Newark had its A2 general-obligation bond ranking put on review for a possible downgrade Aug. 13 by Moody’s, which cited the city’s “weak” finances. The firm must re-rate the city as it is responsible for making the bond payments, Neals said. He said he doesn’t anticipate a rating cut.
“We’re hopeful that our rating is not going to go negative,” Neals said. “We’re putting all of these different things in place to maintain a positive rating. The discussions we’ve had with Moody’s thus far have gone well.”
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